Consumer inflation data on Wednesday showed prices in the United States were rising at a 6.2% year-on-year rate, their fastest pace in three decades, and may prompt both the White House and the Federal Reserve to take measures to combat it. That boosted the dollar, which often trades the opposite of oil.
Brent futures lost $ 2.14, or 2.52%, to $ 82.64 a barrel. The contract peaked at $ 85.50 for the session before falling back.
US crude fell $ 2.81, or 3.34%, to $ 81.34 after hitting a high of $ 84.97 a barrel, just below a seven-year high in recent weeks.
Inflation is heating up as the economic weight of the summer wave of COVID-19 infections fades and supply bottlenecks persist. The Federal Reserve is expected to try to stop the continued price spike, which has lasted longer than originally anticipated.
That triggered a rally in the dollar, which undermines the price of oil as it raises the cost for other countries because oil is primarily traded in the US currency.
Biden said he called on the National Economic Council to work to reduce energy costs and the Federal Trade Commission to stop market manipulation in the energy sector in a greater effort to reverse inflation.
“The comments sent the market crashing down,” said Bob Yawger, head of energy futures at Mizuho in New York.
Separately, crude inventories in the United States increased by 1 million barrels in the last week, less than estimates of an increase of 2.1 million.