US Crude Settles Above $93 a Barrel After EIA Data
Oil futures fell slightly on Wednesday after government data showed U.S. fuel stocks rose sharply last week, a sign of ample supply in the world's top consumer of oil.
U.S. oil futures rose early, then turned negative after U.S. Energy Information Administration data showed gasoline inventories rose 7.4 million barrels last week. That followed a build of nearly 30 million barrels in the final quarter of 2012. Stocks of crude and distillate fuels also rose, data showed.
"The report is solidly bearish with the large builds in refined products, especially gasoline," said John Kilduff of hedge fund Again Capital in New York.
U.S. RBOB gasoline fell nearly two cents.
Brent and U.S. crude futures saw choppy trading as investors remain cautious ahead of economic data from China, expected to confirm revived economic growth, and the results of this week's Bank of England and European Central Bank (ECB) meetings.
U.S. crude futures had losses limited by equities strength on Wall Street, with stocks supported after Alcoa started the corporate earnings season reporting better-than-expected revenue and an encouraging outlook for 2013.
Also supporting U.S. crude were expectations that the upcoming expansion of Seaway pipeline carrying crude oil from the Midwest to the Gulf Coast will relieve the glut of crude supply in the Midwest.
U.S. Oil Stocks, Production Rise
U.S. crude oil inventories rose 1.3 million barrels last week,slightly below expectations for a build of 1.5 million, the U.S. Energy Information Administration (EIA) said in its weekly report on Wednesday.
But gasoline stocks rose by 7.4 million barrels and distillate inventories increased 6.7 million barrels, the EIA said, much more than analysts expected.
"The products builds were whoppers, while the crude build was interesting because it wasn't as much as one might expect with the big rise in imports," said Phil Flynn, an analyst at Price Futures Group in Chicago.
The EIA's report also said U.S. crude production rose above 7 million barrels last week for the first time since 1993.
The EIA had said in a separate report on Tuesday that U.S. crude oil production will rise by the largest amount on record in 2013, and is set to soar 25 percent over two years.
The rapid increase underscores how improvements in horizontal drilling and hydraulic fracturing technology - commonly referred to as 'fracking' - have transformed the energy market in the last five years,allowing producers to tap shale oil from tight rock formations.
China, Europe in Focus
Helping mute oil price moves was investor caution ahead of Chinese trade data, more U.S. corporate earnings and the outcome of a ECB policy meeting for insight on prospects for the world's largest economies.
China, the world's biggest energy consumer, will release its December trade figures on Thursday and fourth-quarter economic growth numbers on Jan. 18.
Reuters polls predict that the trade numbers may show marginal improvement in the economy, although weak U.S. and European demand may weigh on exports. Economic growth may have accelerated, ending seven quarters of weaker expansion.
The Bank of England and ECB policymakers begin two-day meetings on Wednesday and investors will be looking for hints that the ECB may lower interest rates in 2013 to pull the regional economy out of recession.