Oil falls sharply after big build in US inventories

Highlights:  

• WTI down 3.5%, Brent down 3%
• Biden blames higher oil and gas prices on OPEC
• EIA shows bigger than expected jump in crude inventories
  

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Oil prices fell on Wednesday after US crude stocks rose more than expected in the most recent week, even as gasoline inventories hit a four-year low in the world's largest oil consumer.

Brent crude futures were down $2.53, or 3%, at $82.16 a barrel at 11:19 a.m. EDT (1519 GMT). US West Texas Intermediate (WTI) crude futures tumbled $2.97, or 3.5%, to $80.95 a barrel.

Crude stocks rose more by 3.3 million barrels in the most recent week, more than expected, but gasoline stocks fell to their lowest level since November 2017. US oil market supply has tightened, with stocks at the Cushing, Oklahoma storage hub at their lowest in three years.

Traders also expect the US Federal Reserve will act to curb inflation, which could sap some speculative buying in risk assets including oil.

"Markets already have been under pressure," said Phil Flynn, analyst at Price Futures Group in Chicago. "We're down because of profit taking from the Fed meeting today."

President Joe Biden, speaking at a climate summit in Glasgow, blamed a surge in oil and gas prices on a refusal by OPEC nations to pump more crude. The average retail price of a gallon of gasoline in the United States was lately at $3.40, according to AAA, up about 20 cents from a month ago.

The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, meets on Thursday and is expected to reconfirm plans to keep monthly supply increases steady despite calls for a raise.

In a sign high prices are encouraging more supply, BP said on Tuesday it would ramp up investments in onshore US shale oil and gas to $1.5 billion in 2022 from $1 billion this year. Overall, US output increased to 11.5 million barrels per day, equaling the highest level of US production so far this year.