WASHINGTON (dpa-AFX) - Crude oil prices dropped from 5-month highs on Thursday amid concerns the Federal Reserve will keep interest rates higher for a longer period due to inflationary pressures.
The recent data showing a sharp jump in U.S. crude inventories last week weighed as well, offsetting supply concerns stemming from tensions on the geopolitical front.
Oil prices were also weighed down by reports about a power outage that resulted in the shutdown of multiple fuel-producing units at Motiva Enterprise's massive 626,600 barrel per day Port Arthur, Texas facility on Wednesday.
West Texas Intermediate crude oil futures for May ended down by $1.19 at $85.02 a barrel.
Brent crude futures were down $0.51 or 0.56% at $89.97 a barrel a little while ago.
The latest EIA report showed crude oil inventories shot up by 5.8 million barrels last week after jumping by 3.2 million barrels in the previous week. Economists had expected crude oil inventories to increase by 2.4 million barrels.
On the rate front, with consumer prices rising more than expected in the month of March, it is now feared that the Fed is unlikely to reduce interest rate till September.
According to OPEC's Monthly Oil Market Report released today, OPEC's crude oil production edged up by 3,000 barrels per day in March compared to February as Iran and Saudi Arabia slightly boosted output while Iraq continued to produce more than it is expected to.
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