Oil prices fell for the second consecutive day on Friday amid an unexpected rise in US crude and fuel stockpiles, as investors profited after gauges hit seven-year highs earlier in the week.
However, both crude oil gauges have gained around 2% this week for the fifth week in a row. Prices have risen more than 10% so far this year amid concerns about tighter supply.
Brent futures fell 49 cents, or 0.6%, to $87.89 a barrel, while West Texas Intermediate (WTI) crude fell 41 cents, or 0.5%, to $85.14.
Earlier in the week, both Brent and WTI rose to their highest levels since October 2014.
The EIA reported the first U.S. stockpile increase since November, with gasoline inventories at an 11-month high, contrary to industry expectations.
Industry investors were not surprised to see the oil price rally slow. WTI crude fell after a surprise rise in US inventories and risky assets on Wall Street plunged into free fall.
Supply-side fundamentals support expectations for crude oil prices above $100, likely by summer. Analysts expect the current pressure on prices to be limited due to supply concerns and increased demand.
OPEC+ is struggling to meet its target of 400,000 barrels per day (bpd) monthly production growth. Some members are having trouble keeping up with targets due to technical production inadequacies.
In the United States, energy firms did not increase the number of oil rigs this week for the first time in 13 weeks.
Geopolitical tensions in Eastern Europe and the Middle East are also increasing fears of supply disruptions.
Top diplomats made no significant headway in talks on Russia and Ukraine, but agreed to continue talks to try to resolve a crisis that has fueled fears of military conflict.
With low reserve OPEC+ capacity, low inventories, and rising geopolitical tensions, there are rumors that Brent is expected to reach around $120 a barrel by mid-2022. Crude oil demand is expected to hit record levels this year and Brent is expected to trade in the $80-$90-per-barrel range for the short term.