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Oil prices fell sharply on Wednesday, affected by the rise of the dollar, after US President Joe Biden said his administration was looking for ways to reduce energy costs amid a general rise in inflation.
Brent and US crude futures fell at the end of the session as traders sold risky assets, including stocks and commodities, amid expectations that central banks would take measures to curb price hikes.
Data on Wednesday showed consumer price inflation in the United States rose 6.2% year on year, the fastest rate in three decades, and may prompt the White House and the Federal Reserve (the US central bank) to act to address it. This boosted the dollar, which usually trades in inverse proportion to oil.
Brent crude futures fell $2.14, or 2.5 percent, to settle at $82.64 a barrel. The contracts rose during the session to $85.50 before falling back.
And US crude contracts lost $2.81, or 3.3 percent, to settle at $81.34 a barrel, after rising to $84.97 during the session, when it approached a seven-year high reached during the past few weeks.
Crude stocks in the United States rose 1 million barrels in the week ending November 5, compared to analysts’ expectations for an increase of 2.1 million barrels.
A number of analysts said that prices may continue to rise in the coming months, but they also pointed out that the continuation of the current rise may motivate shale oil companies to increase production, which would compensate for the increase in demand.
Prices had risen in the past few days amid expectations that the Organization of Petroleum Exporting Countries (OPEC) and other major exporting countries would stick to the policy of gradually increasing production.
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