Oil prices fell 3 percent on Wednesday, paring their big gains for August, after government data showed a larger-than-expected weekly build in U.S. crude and distillate stockpiles and a smaller-than-expected drawdown in gasoline.
Crude futures remained on track for their best monthly return since April, rising as much as 11 percent, after speculation in recent weeks that the Organization of the Petroleum Exporting Countries and other oil producers could agree to curb output at September talks in Algeria.
Even so, oil has fallen since the start of this week as the dollar rallied and expectations for an OPEC-led production freeze fizzled. Wednesday's supply-demand data from U.S. Energy Information Administration (EIA) could trigger a more bearish trend, analysts said.
The EIA said crude stockpiles rose for a second straight week, building by 2.3 million barrels last week, compared with analysts' expectations for a rise of 921,000 barrels.