Oil prices fell on Thursday, as expectations of a warm US winter capped a rally that sent prices to three-year highs above $86 a barrel early in the session on tight supplies and a global energy crisis.
Winters across much of the United States are expected to be warmer than average, according to forecasts released by the National Oceanic and Atmospheric Administration Thursday morning.
Brent crude fell $1.21 to settle at $84.61, after reaching a session high of $86.10, the highest since October 2018. US West Texas Intermediate crude fell 92 cents to reach $82.50.
Prices rose the first day on Wednesday when the US Energy Information Administration revealed a decline in crude oil and fuel stocks, with crude stocks at the Cushing Oil Center in Oklahoma falling to their lowest level in three years.
“Traders who had previously set a minimum of $86 to sell took advantage of the opportunity to take some profits… As a result, oil prices have fallen,” said Louise Dixon of Rystad Energy Consulting.
The price of Brent crude has increased by more than 60 percent this year, supported by a slow increase in supplies from the Organization of the Petroleum Exporting Countries (OPEC) and its allies and the global coal and gas crisis, which has caused a shift to oil for power generation.
Oil has also come under pressure from lower coal and natural gas prices. Coal prices in China fell 11 percent, adding to the losses it has incurred this week since Beijing hinted it might intervene to calm the market.
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