Oil prices slipped on Wednesday after Beijing stepped up efforts to tame record high coal prices and ensure coal mines operate at full capacity as Beijing moved to ease a power shortage.
Chinese coal prices and other commodity prices slumped in early trade, which in turn pulled oil prices down from an uptick earlier in the day.
China’s National Development and Reform Commission said late on Tuesday that it would bring coal prices back to a reasonable range and crack down on any irregularities that disturb market order or malicious speculation on thermal coal futures.
Brent crude futures dropped 86 cents, or 1%, to $84.20 a barrel, paring a 75-cent rise in the previous session, but still lingering close to multi-year highs.
U.S. West Texas Intermediate (WTI) crude futures for November, which expires on Wednesday, fell $1.00 to $81.96 a barrel.
Petroleum markets in general remain supported on the back of a global coal and gas crunch, which has driven a switch to diesel and fuel oil for power generation.
But the market on Wednesday was also pressured by data from the American Petroleum Institute industry group which showed U.S. crude stocks rose by 3.3 million barrels for the week ended Oct. 15, according to market sources.
That was well above nine analysts’ forecasts for a rise of 1.9 million barrels in crude stocks.
However U.S. gasoline and distillate inventories, which include diesel, heating oil and jet fuel, fell much more than analysts had expected, pointing to strong demand.
Data from the U.S. Energy Information Administration was due later on Wednesday.
