Oil drops for 2nd session on unexpected rise in U.S. inventories

Oil prices dropped for a second session Thursday, under pressure from an unexpected rise in U.S. crude stocks that raised concerns over demand after prices rallied to multi-year highs.

U.S. crude slid 0.43%, or 33 cents, to $77.10 a barrel after the market climbed on Wednesday to $79.78, the highest since November 2014. Brent crude 2 cents, to $81.06 a barrel.

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"Commercial stockpiles of crude rose ... last week, according to EIA data," ANZ said in a note. "Stockpiles of gasoline also surged raising concerns of weaker demand."

U.S. crude inventories rose by 2.3 million barrels last week, the U.S. Energy Information Administraion (EIA) said, against expectations for a modest dip of 418,000 barrels. Gasoline inventories also rose, while distillate inventories were down slightly.

Global oil prices have jumped more than 50% this year, adding to inflationary pressure that could slow recovery from the COVID-19 pandemic and impact consumer demand. Natural gas and coal prices have also climbed.

The Organization of the Petroleum Exporting Countries and allies (OPEC+) said on Monday it would stick to its pact for a gradual increase in oil output, sending crude prices to multi-year highs.

OPEC+`s decision raise to oil output modestly and gradually, despite this year`s surge in prices, was partly driven by concern that demand and prices could weaken, sources close to the group told Reuters.