WASHINGTON (dpa-AFX) - Oil prices fell sharply on Thursday, coming off multi-month highs recorded in the previous session on inventory drop and U.S. sanctions on Russian oil and energy firms.
Oil prices dropped amid easing concerns about supply on expectations the Houth militia will halt attacks on ships in the Red Sea, following Israel and Hamas agreeing to implement the ceasefire agreement that was drafted and approved by the UN Security Council.
West Texas Intermediate Crude oil futures for February settled lower by $1.36 or about 1.7% at $78.68 a barrel.
Brent crude futures closed down $0.74 or about 0.9% at $81.29 a barrel.
Oil prices rose sharply on Wednesday as crude inventories in the U.S. dropped in the week ended January 10th. Possibility of supply disruptions due to new sanctions by the U.S. on Russia contributed as well to the rise in oil prices.
Data from the Energy Information Administration (EIA) showed crude oil inventories in the U.S. dropped by 2 million barrels last week, after falling by 1 million barrels in the previous week. Economists had expected crude oil inventories to decrease by 1.6 million barrels.
At 412.7 million barrels, U.S. crude oil inventories are about 6% below the five-year average for this time of year, the EIA said.
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