Investing.com-- Oil prices settled higher Wednesday after industry data showed an unexpected mega build in U.S. crude stocks, driven by strong imports, challenging the notion of tighter markets in the near-term.
At 14:30 ET (18:30 GMT), Brent oil futures expiring in May settled 0.3% lower at $81.35 a barrel, while West Texas Intermediate crude futures fell 0.2% to $86.09 a barrel.
Crude stockpiles unexpectedly increases, Gasoline stocks rise amid weaker demand
Inventories of U.S. crude fell by roughly 3.2 million barrels in the week ended Mar. 22, confounding estimates for a decline of 700,000, snapping two weeks of larger-than-expected inventory builds, data from the Energy Information Administration showed Wednesday.
Gasoline inventories, one of the products that crude is refined into, rose by 1.3M barrels against expectations of a draw of 1.7M barrels while distillate stockpiles fell by 1.2M barrels, compared to expectations for a decline of 518,000 barrels.
The surprise build in gasoline comes as demand fell by about 94,000 barrels per day, while refinery activity rose by 0.9%.
Strength in the dollar, which hovered near one-month highs, also weighed on oil prices, especially as traders pivoted into the greenback ahead of more cues on U.S. inflation and interest rates later this week.
OPEC+ meets next week
The Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+, is set to meet next week to review the market and the extent to which members are implementing the agreed output cuts.
However, the group is unlikely to make any oil output policy changes until a full ministerial gathering in June, Reuters reported, citing sources.
OPEC+ agreed earlier this month to extend output cuts of about 2.2 million barrels per day to the end of June, although there has been uncertainty over whether all members have fully complied with their agreed production levels.
(Peter Nurse, Ambar Warrick contributed to this article.)