SINGAPORE (Reuters) – Thursday's oil prices fell from the 4-year highs of the last session, under pressure from rising US inventories, and sources said Russia and Saudi Arabia had concluded a private deal to increase crude oil production in September.

FILE PHOTO: A pumpjack brings oil to the surface in the Monterey Shale, California, USA, April 29, 2013. REUTERS / Lucy Nicholson / File photo

Brent crude oil futures LCOc1 traded at $ 85.85 a barrel at 0104 GMT, a decrease of 44 cents or 0.5 percent from the last close.

Brent has reached a four-year high of $ 86.74 a barrel on Wednesday.

West Texas Intermediate (WTI) CLc1 crude oil futures were 30 cents, or 0.4 percent, at $ 76.11 per barrel.

"Data for the past week showed a much larger than expected … build in US commercial crude oil (inventories), which generally suggests that oil prices should fall," said Stephen Innes, Asia Pacific's director of trade Futures Brokerage Oanda in Singapore.

US crude oil stocks C-STK-T-EIA rose nearly 8 million barrels last week to around 404 million barrels, the largest increase since March 2017, data released by the Energy Information Administration on Wednesday.

Weekly utilization of the Midwest refinery in the US fell to 78.9 percent, the lowest since October 2015, according to the data.

Meanwhile, US crude oil production C-OUT-T-EIA remained at a record high of 11.1 million barrels per day (bpd).

(For a graph on crude emissions, stocks and drilling, click on tmsnrt.rs/2wc5wpr)

"This to the other big news of the day from Riyadh … that Saudi Arabia and Russia will boost production," said Innes.

Russia and Saudi Arabia reached a private agreement in September to raise oil production to cool rising prices, Reuters reported Wednesday before coordinating with other producers, including the rest of the Organization of Petroleum Exporting Countries (OPEC).

The measures taken by Russia and Saudi Arabia stem from markets heating up before the US sanctions on the Iranian oil sector, which will start on 4 November and many analysts expect it to be around 1.5 million barrels a day out of the markets.

On the demand side, it is increasingly feared that high oil prices and flagging emerging market currencies create a toxic inflationary mix that could undermine fuel demand and economic growth.

"We looked very closely at the demand signals in the market, and what we saw is not good," JBC Energy said in a statement to customers on Wednesday.

The energy advisory firm said it had revised down its oil demand forecast for Brent over $ 80 and dive currencies in many emerging markets, as well as emerging product stocks and the ongoing Sino-U.S. trade dispute.

"We also do not talk about cosmetic changes, we lowered our growth forecast for 2018 by a whopping 300,000 bpd to under 1.1 million bpd," it said.

(For oil price charts in different currencies, click on tmsnrt.rs/2N67zl9)

Reporting by Henning Gloystein; Arrangement of Joseph Radford

Our standards:The Thomson Reuters Trust Principles.

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