Oil prices decline from multi-year highs as US crude stocks soar

By Sibel Morrow

ANKARA (AA) – Oil prices dropped on Thursday after record-high price rallies as an unexpected build in US crude oil inventories signaled declining demand in the world’s largest oil-consuming country.

International benchmark Brent crude was trading at $80.78 per barrel at 0700 GMT for a 0.37% decrease after closing Wednesday at $81.08 a barrel.

American benchmark West Texas Intermediate (WTI) traded at $76.66 a barrel at the same time for a 0.99% fall after ending the previous session at $77.43 per barrel.

Thursday’s price slump was spurred by a surprise build in the US crude oil and fuel inventories, which indicates that supply is recovering and demand is falling in the country.

US commercial crude oil inventories rose 0.6% during the week ending Oct. 1, according to the latest data released by the Energy Information Administration (EIA).

Inventories increased by 2.3 million barrels to 420.9 million barrels higher than the market expectation of a 300,000-barrel rise.

Gasoline inventories also increased by 3.3 million barrels to 225.1 million barrels over that period.

Both benchmarks had faced multi-year-high levels after the world’s largest oil producers failed to respond to the low supply crisis in the global markets, badly affecting world economies that recovered from demand damages due to the COVID-19 pandemic.

Brent hit $83.46 a barrel, reaching its highest level since October 2018. WTI also hit its seven-year-high level with $79.78 a barrel.

Record high prices came after the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, on Monday decided to keep its output unchanged instead of ramping up its production in line with rising demand for crude oil.

High natural gas prices, which have surged 600% due to supply shortages and low production of other fuels, have spurred crude oil demand, which could act as a substitute for natural gas.