Traders said prices fell after an American Petroleum Institute report on Tuesday showed a 9.2-million-barrel rise in gasoline stocks in the week ended December 1 and an increase of 4.3 million barrels in distillate inventories, which include motor diesel and heating oil.
Brent crude futures were down $1.28 at $61.55 US a barrel approaching noon ET Wednesday, after reaching a session high of $62.93 USA, while US crude futures dropped $1.33, or 2.2%, to $56.33 U.S.
The U.S. Energy Information Administration reported Wednesday that domestic crude supplies fell (http://www.marketwatch.com/story/eia-reports-a-fall-in-us-crude-supply-but-gasoline-stocks-rise-more-than-expected-2017-12-06) 5.6 million barrels for the week ended December 1. Net petroleum supplies fell by about 2.5 million barrels because of dips in other oils and products, according to the Energy Department.
This week's unexpectedly large build in gasoline inventories is likely to put downward pressure on oil prices. They are now 9.1 million barrels below their level during the same week in 2015, but "they are still more than 100 million barrels above their level from the same week during 2014", said Jenna Delaney, senior oil analyst at S&P Global Platts.
Daily February Brent Crude
USA gasoline stocks rose by 6.8 million barrels and distillate inventories were up 1.7 million barrels, government data showed, both exceeding expectations in a Reuters poll. The API report showed an increase of 9.196 million barrels, compared to forecasts of a much smaller 1.145-million-barrel build. January natural gas rose 0.3% to $2.922 per million British thermal units.
On paper the report was mixed with the crude oil number bullish and the fuel numbers bearish.
But the price has slipped from November's peak at around $65 US a barrel, the highest since mid-2015.
"But a weaker economic performance and a decline in refinery capacity utilization in the first quarter could be a drag on oil demand and dampen prices", said Georgi Slavov, the head of research at commodity broker Marex Spectron.