The price of Brent crude oil heads towards $81 a barrel after President Joe Biden said his administration was looking for ways to reduce energy costs amid escalating inflation rate.
The U.S inflation rate rose at a 6.2 percent rate year-on-year in the month of October, according to the data from Labor Department. The highest in over three decades.
Price increases were attributed to the surge in the price of fuel, supply constraints, among others.
“There’s, no doubt, more pressure on the administration after the inflation reading numbers today,” said Phil Flynn, senior analyst at Price Futures Group. “There’s a growing concern the Fed may have to go back to acting more aggressively on a rate increase, so that’s given the dollar a rally.”
Brent crude oil, against which Nigerian oil is priced, dropped to $82.42 a barrel as at 9:22 pm Nigerian time on Wednesday.
Experts blamed the decline on Joe Biden’s comment that he has asked the National Economic Council to work on reducing energy costs and the Federal Trade Commission to push back on market manipulation in the energy sector in a larger effort to reverse inflation.
“Those comments caused the market to tank,” said Bob Yawger, director of energy futures for Mizuho in New York.
Meanwhile, the U.S. energy report showed crude oil inventories grew by 1 million barrels last week, short of estimates for a 2.1 million build in crude stocks.
