Oil prices fell Wednesday after the Chinese government maximized its efforts to control peak coal prices and ensure that coal mines were running at full capacity as Beijing sought to ease energy shortages.

This drop in the price of oil had its origins in the price retreats of coal and other Chinese raw materials earlier in the business cycle. But despite this there are fears that this is not yet the breath of fresh air.

OANDA senior market analyst Jeffrey Halley notes that "with coal and gas prices falling and Relative Strength Index (RSI) technical indicators still in an overbought scenario, the odds of a sharp but material drop in oil prices are increasing."

China's National Development and Reform Commission said it would bring coal prices back into a reasonable range and prevent any irregularities from disrupting the market order on thermal coal futures.

Brent crude futures fell 64 cents, or 0.8%, to $84.44 per barrel, paring a 75-cent increase in the previous session but still holding near multi-year highs.

U.S. West Texas Intermediate (WTI) futures for November, which expired this Wednesday, fell 56 cents, to $82.40 per barrel. The most active WTI contract for December was down 59 cents, or 0.7%, to $81.85 per barrel.

"Brent crude could fall to $82 and WTI to $78.50 per barrel, and still remain comfortably in a high value market... Even if oil were to pull back $5, I still believe it will be short-lived," said analyst Halley.

Oil markets in general continue to be supported in the context of a global coal and gas crisis, which has led to a shift to diesel and fuel oil for power generation.

But this Wednesday, the market was also pressured by data from the American Petroleum Institute's industry group that showed US crude stocks increased by 3.3 million barrels for the week ending October 15, according to market sources. This was much higher than nine analysts' forecasts for a 1.9 million barrel increase in crude stocks.

However, US gasoline and distillate inventories, which include diesel, heating oil and jet fuel, fell much more than analysts had expected, pointing to strong demand.