LONDON, Sept 26: Oil prices dropped on Wednesday after the US government revealed that crude stockpiles had risen for the first time in almost three months last week in the United States.

New York’s main futures contract, light sweet crude for delivery in November, fell 17 cents to $79.36 per barrel.

In London, the price of Brent North Sea crude for November delivery shed 42 cents to $77.20 per barrel.

The US Department of Energy said on Wednesday that crude inventories had jumped by 1.8 million barrels in the United States -- the world’s biggest consumer of energy -- during the week ended September 21.

Meanwhile the data compared with analysts’ forecasts for a fall of 2.15 million barrels.

The latest DoE report “certainly argues there is no physical shortage of oil,” said Citigroup analyst Tim Evans.

Last week, oil prices had hit all-time peaks on concerns over tight American energy supplies and fears of stormy weather in the rig-heavy US Gulf of Mexico.

The record-breaking rally saw New York crude hit $84.10 and Brent strike $79.94 per barrel.

Despite US stockpiles rebounding last week, analysts said supply worries remain going into the northern hemisphere winter.

“Market participants are still worried about tight US fuel supplies and forecasts for the ever increasing global energy demand, which is likely to once again outpace supply next year,” Sucden analyst Andrey Kryuchenkov said.

Oil prices have also found support from the sliding US currency.

“The broad weakness in the greenback continues to support oil prices, with most dollar-denominated commodities benefiting from a weaker dollar, as they become relatively cheaper for foreign investors,” Kryuchenkov added.

“Moreover, it seems that market participants are turning their attention back to geopolitical developments, with a continuous stand off between Iran and the West over its nuclear ambitions.”

Key crude producer Iran is the second-biggest member of the Opec oil cartel after kingpin Saudi Arabia.—AFP