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Investing.com -- Crude oil futures fell back sharply on Thursday one day after comments from the Federal Reserve spurred a broad rally, as oil traders shifted their focus back to the glut in global supply.
On the New York Mercantile Exchange, WTI crude for April delivery fell 0.94 to 43.72 a barrel ahead of Friday's Weekly Rig Count report from oil services firm Baker Hughes (NYSE:BHI). WTI crude for May delivery also dropped 1.24 to 45.41.
Prices for the international benchmark of crude also dropped precipitously, after Kuwait's oil minister said his nation has agreed to keep output levels steady. On the Intercontinental Exchange (ICE), brent crude for May delivery fell 1.49 to 54.42 a barrel. The spread between the international and U.S. domestic benchmarks for crude for May contracts stood at $8.99, down from $9.26 a day earlier.
Speaking to reporters in Kuwait City, Ali al-Omair, Kuwait's oil minister, indicated that current market conditions have forced Opec to maintain its production level. While al-Omair said Kuwait "will be very happy if other producers cut output," he added that the world's 10th largest oil producer can't afford to "lose its share in the market."
Oil prices have plummeted since Opec declined to slash its production levels in late-November to a level below 30 million barrels per day. At the time, brent stood at just under $75 a barrel – roughly five dollars more than the price of WTI. Kuwait has held its production constant at approximately 3 million barrels per day.
Traders are anticipating further declines in rig counts when Baker Hughes releases its weekly report on Friday. Last week, figures Baker Hughes released for the week ending Mar. 6 indicated that the rig total nationwide fell by 67 to 1,125, down by nearly 600 rigs from March, 2014 levels. Despite the decline in rig totals, oil is being pumped in the U.S. at its fastest rate in more than 30 years.
On Wednesday, crude futures reached a six-year low after the Energy Information Administration (EIA) said that oil supply in the U.S. last week grew by 9.6 million barrels. Inventory levels nationwide are currently at an 80-year high at 458.5 million barrels.
Oil prices then rallied after the Federal Reserve backed away from its stance of remaining patient on its timing of raising interest rates. The Fed could decide to hike interest rates at any meeting this year after the completion of its next meeting in April, Fed chair Janet Yellen said.
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