Investing.com - Oil pared losses midday Wednesday following an unexpected rise in U.S. crude inventories. But it was still in the red amid a host of geopolitical uncertainties.
Crude oil WTI Futures fell 2% to $56.12 at 12:22 PM ET (16:22 GMT).
Brent futures, the benchmark for global crude, fell 2.1% to $61.78.
U.S. oil stockpiles rose by 2.4 million barrels last week, the Energy Information Administration reported.
Analysts were predicting a crude drawdown of 249,000 barrels, according to Investing.com.
“This could be the clearest signal that the post-summer crude draws are over and that we could see substantial builds here on, which is hardly ideal for oil bulls,” Investing.com analyst Barani Krishnan said. “As of now, WTI is just about $1 higher than where it stood on Sept 13, the eve of the Saudi attack. In less than two weeks, we have given back all that huge geopolitical premium we saw from the Saudi crisis.”
Helpful to bulls were refinery levels falling below the key 90% level, likely a function of Texas flooding, builds in the Cushing pipeline and a big slide in imports, Krishnan added.
Gasoline inventories rose by 519,000 barrels, compared with a consensus for a rise of 296,000 barrels. Distillate stocks tumbled by nearly 3 million barrels, while analysts were looking for a drawdown of 733,000 barrels.
The distillate draw was the “most sparkling” number on the bullish slide, Krishnan added.
“Offsetting these positives is U.S. production, which remains near record highs at 12.4 million bpd, while exports are steady at just under 3 million bpd and not ramping further,” he said.