Oil drops 1% on N.Korea nuclear tests news, profit-taking

Oil prices on both the sides of the Atlantic fell sharply from weekly tops on the final trading day of the week, reversing a part of bullish EIA report-backed rally.

Oil hit by risk-off

Currently, both crude benchmarks decline nearly 1%, with Brent below $ 49.50, while WTI tests $ 47 mark. Oil prices reversed course and turned negative after markets resorted to profit-taking, following 4% jump witnessed yesterday on unexpected drawdown in the US crude reserves.

The US EIA noted in its weekly report that crude oil inventories fell by 14.51 million barrels in the week ended September 2, against an expected a crude-stock gain of 225,000 barrels, while the American Petroleum Institute late Tuesday reported a supply drop of 12.1 million barrels.

Moreover, latest reports over North Korean nuclear missile testing stoked geo-political tensions, which spooked markets and crushed the appetite for risky assets such as oil, equities etc.

Later today, all eyes remain on the US rigs count data, which may shape up next direction in the black gold.