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Crude oil prices take a breather after hitting 2016 highs

Reuters Reuters 28/04/2016 By Henning Gloystein

Oil pump jacks are seen next to a strawberry field in Oxnard© REUTERS/Lucy Nicholson Oil pump jacks are seen next to a strawberry field in Oxnard Crude futures pulled back from 2016 highs early on Thursday as traders locked in profits after April's sharp rally, but analysts said falling U.S. production and strong investor appetite could push prices higher.

International Brent crude futures were trading at $47.02 per barrel at 0045 GMT, down 16 cents from their last settlement, and U.S. West Texas Intermediate (WTI) futures were down 12 cents at $45.21 a barrel.

The price dip came after both crude benchmarks hit 2016 highs the previous day in what has been one of the steepest price rises in recent years. Both Brent and WTI have rallied more than 70 percent since their respective 2016 lows in January and February.

Analysts said falling output in the United States and a weak dollar were pushing prices up and attracting investors.

"The recent trend of rising crude oil prices received another boost after U.S. output was shown to have fallen again last week," ANZ bank said, following a release by the U.S. Energy Information Administration (EIA) showing that crude oil production fell to 8.94 million barrels per day (bpd) last week, down almost half a million bpd from this time last year.

The output fall outweighed bearish data showing that U.S. crude stocks climbed 2 million barrels last week to an all-time peak of 540.6 million barrels, traders said.

However, the record crude storage figures may have spurred some traders to take profits in Thursday morning trade by closing long positions, they added.

ANZ said that further bullish momentum could emerge due to ongoing weakness in the dollar, which is down over 5 percent this year against a basket of other leading currencies, as a weaker greenback makes dollar-traded crude cheaper to buy for countries using other currencies at home.

"Investors should take comfort from a relatively market neutral FOMC (U.S. Federal Open Market Committee) statement. With fundamentals continuing to improve, this should see them to add to their already bullish positions in coming days," ANZ said.

The Federal Reserve said on Thursday that it would leave U.S. interest rates unchanged and that it was in no rush to hike rates soon.

(Editing by Richard Pullin)

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