NEW YORK: Oil prices dropped nearly 2% on Wednesday, pulling back from multi-year highs, as an unexpected rise in U.S. crude inventories prompted buyers to take a breather after recent torrid gains.
U.S. crude inventories rose by 2.3 million barrels last week, against expectations for a modest dip of 418,000 barrels, the U.S. Energy Department said. Gasoline inventories also rose, while distillate inventories were down only modestly.
Brent crude hit $83.47 a barrel, its highest since October 2018, but settled at $81.08, down $1.48 a barrel, or 1.8%. U.S. crude climbed to $79.78, highest since November 2014, before retreating to $77.43 for a daily decline of $1.50 or 1.9%.
The price of global benchmark Brent has surged more than 50% this year, adding to inflationary pressure that could slow recovery from the COVID-19 pandemic. Natural gas has surged to a record peak in Europe and coal prices from major exporters have also hit all-time highs.
The latest surge in the crude prices had been underpinned by the refusal of the Organization of the Petroleum Exporting Countries and allies to boost output and concern about tight energy supplies globally.
On Monday, OPEC, Russia and other allies, known as OPEC+, chose to stay with a plan to increase output gradually and not boost it further as the United States and other consumer nations have been urging.
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