The price of oil fell to near $109 a barrel Thursday, easing off a two-year high, after official figures showed a rise in U.S. crude inventories.
By early afternoon in Europe, benchmark oil for October delivery was down 65 cents to $109.45 a barrel in electronic trading on the New York Mercantile Exchange.
The contract rose $1.09, or 1 percent, to $110.10 a barrel on Wednesday, driven higher by the prospect of Western military intervention in Syria's civil war. That was its highest closing price since May 3, 2011. Earlier in the day, oil charged as high as $112.24.
The Energy Department's Energy Information Administration said crude stocks for the week ended Aug. 23 rose by 3 million barrels to 362.1 million barrels. In contrast, analysts had been expecting a slight fall in crude stockpiles. Rising supplies tend to hold oil prices down.
Still, JBC Energy said current developments, such as low spare capacity in Saudi Arabia and signs of an improving global economy, pointed to tighter markets.
The oil price has surged 27 percent since touching a low for the year of $86.68 on April 17. Recently, it has been propelled higher by political unrest in Egypt and the threat of U.S. intervention in Syria's civil war. Neither country is a major oil exporter, but traders are concerned that the violence could spread to more important oil-exporting countries or disrupt major oil transport routes.
Despite the higher geopolitical risks, analysts at Commerzbank in Frankfurt dismissed recent predictions that oil prices could rise to $150 a barrel as "unfounded scaremongering."
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