By Yuka Obayashi

TOKYO (Reuters – Oil prices plummeted Friday after reaching seven-year highs earlier in the week. This was due to an increase fuel stockpiles, which prompted investors and traders to profit from the rally.

Futures fell 2.8% to $85.92 per barrel at 0136 GMT, or $2.46 in futures. The contract fell as low as 3% earlier, its largest drop since Dec. 20, 2014. Global benchmark was at $89.50 per barrel Thursday. It is the highest price since October 2014.

U.S. West Texas Intermediate oil futures dropped $2.61 (or 3.1%) to $82.94/barrel After rising to their highest level since Oct. 2014, the contract fell by as much as 3.2% earlier.

On Thursday, the recent rise in crude oil prices seemed to have run its course. Brent and WTI closed trading with small losses. Concerns about tight supplies have led to both benchmarks gaining more than 10% thus far in this year.

Hiroyuki Kukawa, Nissan’s general manager for research (OTC:) Securities stated that “Investors made quick-term adjustments to their positions following an increase in U.S. inventories and ahead of weekend.”

According to U.S. Energy Information Administration, (EIA), gasoline inventories rose 5.9 million barrels to reach their highest level since February 2021. Against industry predictions, crude oil stockpiles increased by 515,000 barrels.

EIA also indicated a slightly lower level of crude oil demand, as well as a decrease in refinery run numbers.

As investors worry about central banks increasing interest rates to combat inflation this year, falling equity markets have also affected crude markets. The Nasdaq fell 1.3% in America and 1.7% in Japan.

Chiyoki Ch, Sunward Trading’s chief analyst said that “slumping stock markets and concerns that the Federal Reserve might aggressively raise rates this year” had impacted sentiment.

This week, oil supply issues grew after the Houthi terrorist group in Yemen attacked the United Arab Emirates. Russia is now the third-largest oil producer worldwide. Russia has also built up a substantial troop presence at the border with Ukraine, provoking fear of an invasion.

The International Energy Agency (IEA), however, stated Wednesday that the oil supply would soon outstrip demand. Some producers have set their prices at or near all-time highs while the demand remains strong despite Omicron coronavirus.