Oil bulls have been hoping in recent weeks that crude would rise to $50 a barrel or more, after global crude flows declined nearly 4 million barrels per day due to wildfires in Canada's oil sands region, a near economic meltdown in OPEC member Venezuela and a spate of violent attacks against the Libyan and Nigerian energy industries.
"While we do feel the rally could go slightly further and test the psychological $50 level, we also think the rally has been priced in, especially with the impact expected from Canadian wildfires," said Tariq Zahir, crude trader and portfolio manager at Tyche Capital Advisors in New York.
"So, we wouldn't be surprised to see more profit taking from the longs, especially since there was no immediate follow-through in buying after the data."
Gasoline futures were down nearly 1 percent to around $1.64 a barrel in afternoon trade. The EIA reported gasoline stockpiles rose by 2 million barrels last week, confounding analysts' expectations in a Reuters poll for a 1.1 million barrels drop.
"Gasoline looks to be the weakest horse right now and the momentum of the recent rally that started on May 10th now looks to be breaking down," said David Thompson, executive vice-president at commodities broker Powerhouse in Washington.
He said the picture could worsen for gasoline if futures for the motor fuel break below the $1.60 support. "The bears will be encouraged to increase their selling pressure."