LONDON—Oil prices fell on Friday, after rising to seven-year highs this week, after an unexpected rise in U.S. crude and fuel inventories, and as investors took profits.
Brent crude futures were down $1.49, or 1.6 percent, to $86.89 a barrel by 1010 GMT. The contract earlier fell by as much as 3 percent, the most since Dec. 20. A day earlier the global benchmark touched fresh 7-year highs of $89.50 a barrel.
U.S. West Texas Intermediate (WTI) crude futures slid $1.52, or 1.7 percent, to $84.03 a barrel. The contract fell as much as 3.2 percent, also the most since Dec. 20, after rising to its highest since October 2014 on Wednesday.
The recent rally in crude prices appeared to run out of steam on Thursday when Brent and WTI ended the trading session with slim losses, but both benchmarks have gained more than 10 percent this year and are headed for a fifth straight weekly gain.
“The latest pullback is most likely due to a combination of pre-weekend profit-taking and the absence of fresh bullish catalysts,” said PVM analyst Stephen Brennock, noting bearish data from the Energy Information Administration (EIA).
The EIA reported the first U.S. stockbuild since November, and gasoline inventories at an 11-month high, against industry expectations.
The EIA also reported a slight decline in refinery runs, indicating lower demand for crude.
However, analysts expect the pressure on prices to be limited due to supply concerns and rising demand.
OPEC+, which groups the Organisation of the Petroleum Exporting Countries with Russia and other producers, is struggling to hit its monthly output increase target of 400,000 barrels per day.
Tensions in Eastern Europe and the Middle East are also heightening fears of supply disruption.
UBS expects crude oil demand to reach new record highs this year, and for Brent to trade in a range of $80–90 a barrel for now.
Meanwhile, Morgan Stanley has raised its Brent price forecast to $100/bbl in the third quarter, up from $90/bbl previously.
By Rowena Edwards