Crude oil prices fell from a one-year high above $78 a barrel, as investors questioned whether an $8-a-barrel rally since last week was warranted with global oil stocks still high.
Inventories of crude oil and refined products in the United States, the world's largest energy consumer, remain above year-ago levels.
‘If you look at the stock situation you will not be buying. There is still an awful lot of stocks,’ Rob Montefusco, an oil trader with Sucden Financial in London, said.
US crude oil futures fell for the first time in seven days of trading, retreating by 23 cents a barrel to $77.35, after they rose to a one-year high of $78.17 earlier.
Brent crude was down 32 cents at $75.91.
US crude and product stocks, excluding strategic reserves, remained above 1.1 billion barrels, according to weekly Energy Information Administration data. Stocks were up from year-ago levels of 976m barrels.
The DoE's weekly report showed that petrol stocks fell 5.2 million barrels last week. Analysts had expected a rise. The fall in petrol stocks indicates rising demand and tightening supplies, supporting prices.
Crude reserves rose by 400,000 barrels last week, lower than most analysts' expectations of 600,000 barrels.
Crude prices have been steadily climbing higher in recent trading sessions, buoyed by a weak US dollar that has bolstered investor risk appetite for hard assets such as oil and other commodities to protect their wealth from the slumping US currency. With a weaker dollar, investors holding stronger currencies find it cheaper to buy crude which is priced in dollars.
