© Reuters. FILE PHOTO: Crude oil storage tanks are seen from above at the Cushing Oil Hub in Cushing, Oklahoma March 24, 2016. REUTERS / Nick Oxford / File Photo
By David Gaffen
NEW YORK (Reuters) – Oil prices fell nearly 2% on Wednesday, retreating from multi-year highs as an unexpected rise in inventories prompted buyers to pause after recent sizzling gains.
US crude inventories rose 2.3 million barrels last week, compared to a modest drop of 418,000 barrels, according to the US Department of Energy. Gasoline inventories also increased, while distillate inventories declined only slightly. [EIA/S]
reached $ 83.47 per barrel, its highest level since October 2018, but stood at $ 81.08, down $ 1.48 per barrel, or 1.8%. U.S. crude climbed to $ 79.78, its highest level since November 2014, before falling to $ 77.43 for a daily decline of $ 1.50 or 1.9%.
“We saw some profit taking as oil had gone up dramatically,” said Gary Cunningham, director of Tradition Energy in Stamford, Conn.
The price of the global benchmark Brent has jumped more than 50% this year, adding to inflationary pressure that could slow the recovery from the COVID-19 pandemic. Natural gas has reached a record high in Europe, and coal prices from major exporters have also reached all-time highs.
The latest surge in crude prices was underpinned by the refusal of the Organization of the Petroleum Exporting Countries and its allies to increase production and concerns about limited energy supplies globally.
On Monday, OPEC, Russia and other allies, known as OPEC +, chose to maintain a plan to gradually increase production and not increase it further as requested by the United States. and other consuming countries.
The market fell late in the day after US Energy Secretary Jennifer Granholm, speaking to the Financial Times, raised the possibility that the US could fight rising prices by releasing oil from strategic reserves or potentially stopping crude exports.
The price of oil fell as a result of this news, but the decline was modest. The United States ended a 40-year ban on crude exports in late 2015 and now ships more than 3 million barrels of crude per day. “I don’t think we’re at a point where we want to limit crude oil exports or,” Cunningham said.
U.S. production rose to 11.3 million barrels per day, recovering from storm-related shutdowns more than a month ago to rebound near pandemic highs but still far from the record of 13 million bpd set in 2019. [EIA/S]
With shale companies forcing drilling to focus on investor returns, US production has not made up for OPEC + cuts.
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