Oil prices retreated today a day after spiking above $80 on news of falling US energy inventories, as traders banked profits.
US crude prices for December delivery fell $1.92 to $77.66 a barrel this evening, while Brent crude for January delivery fell $1.67 to $77.80.
Crude reserves in the US - the world's biggest energy consuming nation - fell by 900,000 barrels in the week ending November 13, the Department of Energy said yesterday.
The decline was more than the 600,000 barrels anticipated by the market. US petrol inventories tumbled 1.7 million barrels, confounding expectations for a small gain.
The department added that stockpiles of distillates, which include diesel and heating fuel, fell 300,000 barrels. Analysts had pencilled in a bigger drop of 500,000 barrels.
Analysts said the drop in inventory levels was exacerbated by Hurricane Ida, which weakened to a tropical storm earlier this month but led to the closure of some petroleum installations in the Gulf of Mexico.
The US is seen as key to lifting oil demand, which has been hit by the global economic slump. Crude oil prices had soared $2.50 on Monday owing to a weak dollar and data showing that the Japanese economy expanded 1.2% in the July-September period, traders said. It was the second quarter of expansion in a row in the world's second-largest economy.
Meanwhile, OPEC president Jose Maria Botelho de Vasconcelos has signalled that $75-80 oil is an adequate level to allow for a global economic recovery. The Organisation of Petroleum Exporting Countries (OPEC) pumps about 40% of the world's oil.
The oil market has also this week followed events in oil-exporter Nigeria, where its main armed group has accused the military of staging a dawn raid on a village in the restive crude-producing region, saying it could threaten peace talks.
