Oil prices initally rose after weekly inventory figures for crude oil and gasoline came in tighter-than-expected. Reaction since then has been mixed.
"The EIA data are bullish and of course price-supportive. Once again, we are seeing a drop in product supplies despite runs being up a lot. We're losing ground on products as demand
has been outpacing refinery activity," said Phil Flynn, analyst with Alaron Trading.
Crude stocks fell 1.1 million barrels to 339.7 million barrels. Forecasts were for a gain of 200,000 barrels. Gasoline stocks also fell 1.1 million barrels to 200 million barrels. Analysts were looking for a 300,000 barrel gain. Distillate stocks fell 400,000 barrels to 132.4 million barrels. Consensus was a decline of 500,000 barrels.
High inventories and expectations that a brief cold spell in the U.S. will end soon and ease heating demand have weighed on prices. "The cold snap in the U.S. is almost over and the forecasts are for a return to normal," said Frederic Lassere of SG CIB Commodities.
The U.S. National Weather Service forecast higher than usual temperatures by the weekend in the U.S. Northeast, the world's biggest heating oil market, and said the mild weather could last for two weeks.
In absolute terms, crude oil stocks in the United States are at their highest level for the time of year since 1991.