Singapore — Oil prices dropped for a second session on Thursday, under pressure from an unexpected rise in US crude stocks that raised concerns over demand after prices rallied to multiyear highs.
US crude slid 0.43%, or 33 US cents, to $77.10 a barrel after the market climbed on Wednesday to $79.78, the highest since November 2014. Brent crude fell 2c, to $81.06 a barrel.
“Commercial stockpiles of crude rose … last week, according to EIA [Energy Information Administration] data,” ANZ said in a note. “Stockpiles of gasoline also surged raising concerns of weaker demand.”
US crude inventories rose by 2.3-million barrels last week, the US EIA said, against expectations for a modest dip of 418,000 barrels. Petrol inventories also rose, while distillate inventories were down slightly.
Global oil prices have jumped more than 50% in 2021, adding to inflationary pressure that could slow recovery from the Covid-19 pandemic and affect consumer demand. Natural gas and coal prices have also climbed.
Oil cartel Opec and allies (Opec+) said on Monday it would stick to its pact for a gradual increase in oil output, sending crude prices to multiyear highs.
Opec+’s decision to raise oil output modestly and gradually, despite 2021’s surge in prices, was partly driven by concern that demand and prices could weaken, sources close to the group told Reuters.