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Oil Prices Soften on Profit Taking After Hitting 2016 Highs

Oil prices edged lower on Thursday as traders took profits after three sessions of gains, though prices remained close to their highest this year thanks to a fall in U.S. crude inventories and supply disruptions.

International Brent crude oil futures traded 13 cents a barrel lower at $52.38 a barrel at 0845 GMT, after setting a 2016 high of $52.86 a barrel earlier in the session. U.S. crude fell by 5 cents a barrel to $51.20 after also hitting a new 2016 high at $51.67.

Worker looks at pump jack at oil field Buzovyazovskoye owned by Bashneft company north from Ufa
A worker looks at a pump jack at an oil field Buzovyazovskoye owned by Bashneft company north from Ufa, Bashkortostan, Russia, July 11, 2015. REUTERS/Sergei Karpukhin/File Photo

"While we're above $50 a barrel, momentum still remains fairly positive and what we've just seen today is a little bit of profit taking after three consecutive days of gains," CMC Markets chief market analyst Michael Hewson said.

Oil prices gained ground after data on Wednesday from the U.S. Energy Information Administration (EIA) showed U.S. crude stocks last week fell 3.23 million barrels to 532.5 million, the third consecutive weekly fall.

"Lower than usual Canadian flows have helped fuel the draw in ... stock," consultancy Energy Aspects said.

"We estimate Canadian output losses will total 29 million barrels across May and June, after adjusting for turnaround work that was underway before the wildfires broke out, and assuming a pre wildfire utilization rate of 85 percent of (the 2015 average)," it said.

Where Does Oil Come From? 0:43

A weaker dollar is also supporting oil prices traders said. The dollar is down about 2.4 percent this month against a basket of currencies, making dollar-traded fuel imports for countries using other currencies cheaper.