Oil drops as China considers intervention to ease coal crunch | Reuters

Oil drops as China considers intervention to ease coal crunch | Reuters

Oil prices fell on Wednesday after the Chinese government stepped up efforts to tame record high coal prices and ensure coal mines operate at full capacity as Beijing moved to ease a power shortage.

Brent crude futures dropped 73 cents, or 0.9%, to $84.35 a barrel at 1003 GMT, paring a 75 cent rise in the previous session, but still lingering close to multi-year highs.

U.S. West Texas Intermediate (WTI) crude futures for November, which expires on Wednesday, fell 68 cents, or 0.8%, to $82.28 a barrel. The more active WTI contract for December was down 80 cents, or 1%, to $81.64 a barrel.

"China is planning to take steps to combat the steep rises in the domestic coal market ... which could put considerable pressure on the coal price there and reverse the fuel switch to oil," Commerzbank said.