Crude oil prices rose $80 a barrel in the US, reaching a seven-year-high after the US Energy Department softly refuted its previous remarks about selling oil from its strategic oil reserves.
American benchmark West Texas Intermediate (WTI) crude briefly hit $80.11 a barrel at 14.44 GMT for a 2.31% increase compared to the previous session. This was its highest level since Nov. 2014 when it traded at $80.98 a barrel. WTI eased down and traded at $79.14 a barrel at 16.50 GMT.
International benchmark Brent traded at $83.03 a barrel at the same time for a 1.31% gain after ending the previous session at $81.95 a barrel.
The rise in WTI prices came after the US said has no such plan to sell crude from its strategic oil reserves 'at this time'.
However, the US Secretary of Energy Jennifer Granholm on Wednesday had said the federal government has several tools to cool off rallying energy prices, including a potential release of oil from strategic petroleum reserves and an export ban.
The US has the world's largest strategic reserves of approximately 714 million barrels stored in huge underground salt caverns at four sites along the coastline of the Gulf of Mexico.
According to data released by the US Energy Information Administration on Wednesday, the country’s level of crude oil reserves was nearly 617.8 million barrel, marking an increase of 2.3 million barrels last week.
Prices also found support after some producers started to switch from natural gas to relatively cheaper crude oil amid a worldwide energy crisis.
However, despite pressures from the US to increase its combined production, the OPEC+ group decided to keep its output scheme.
The US had brought up the same request before the group’s meeting earlier in September in an effort to combat climbing gasoline prices, feeding concerns that rising inflation due to increasing energy costs could derail the economic recovery out of Covid pandemic.
Soon after the meeting, both benchmarks recorded massive increases and Brent hit a three-year-high level while WTI reached its highest level since November 2014.
By Sibel Morrow