A bigger-than-expected build in U.S. crude inventories to fresh record highs pushed oil markets down after an early rally on Wednesday over concerns about production cuts in Canada's oil sands region.
U.S. crude stocks, which have been setting record highs since January, grew 2.8 million barrels last week, government data showed, about a million barrels more than analysts' expectations. Gasoline stocks also posted a surprise increase.
The data overshadowed concerns over evacuations in the Canadian province of Alberta, where a wildfire raged unchecked through the Canadian city of Fort McMurray in the heart of the country's oil sands region, prompting some companies, including Suncor Energy and Royal Dutch Shell, to cut back production.
"It's hard to see how it (the wildfire) wouldn't have a broader impact temporarily on pipeline exports," said John Kilduff, a partner at Again Capital Management in New York. "I think it was a legitimate scare that will prove transitory."