US crude settles at $53.11, down 9 cents, after US stockpiles soar to record

How to read the action in oil : Helima Croft

Oil futures fell slightly on Wednesday as record high U.S. crude and gasoline inventories fed concerns about a glut.

Trade was choppy and losses were limited by evidence that OPEC and other producing countries were complying with agreed-upon supply cuts.

The dollar weakened, which also helped support greenback-denominated oil.

U.S. crude stocks rose 9.5 million barrels last week, the U.S. Energy Information Administration (EIA) said, nearly three times more than forecast, but confirming a trade group's report late Tuesday of a larger-than-expected build.

U.S. crude inventories hit a peak at 518.12 million barrels, while gasoline stocks also touched a record, rising 2.8 million barrels to 259.1 million barrels, according to the EIA.

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U.S. crude settled down 9 cents at $53.11. Brent crude was down 24 cents at $55.73 by 2:33 p.m. ET (1933 GMT).

Gasoline prices were up 0.1 percent to $1.5485 a gallon after falling by as much as 0.8 percent.

"The U.S. witnessed yet another week of higher-than-expected stock builds; nonetheless, the build was less than last week's, which helped prices recoup some of the earlier losses," said Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics in London.

"A build in gasoline stock is in tandem with seasonal norms and further builds are expected in the coming weeks as demand for the fuel remains low."

Gasoline inventories have surged 10 percent since the end of 2016, EIA data showed. Last week, stockpiles of the fuel swelled to a record at 259 million barrels.

Traders took the report in stride because refinery maintenance largely explains the build in crude stocks, while lower gasoline demand was probably weather-related, said Helima Croft, global head of commodity strategy at RBC Capital Markets.

"People are not overly concerned there's some real structural weakness in demand," she told CNBC's "Power Lunch."

Oil prices dip despite OPEC cuts

A drop in crude oil imports and distillate fuel stocks also partially offset the headline figure, said John Kilduff, founding partner at energy hedge fund Again Capital.

"Still, the report was very bearish, with crude oil inventories at a record. OPEC has an ocean to drain here, not merely a swamp," he told CNBC.

To support prices, the Organization of the Petroleum Exporting Countries and other producers including Russia are cutting output by almost 1.8 million barrels per day in the first half of 2017.

OPEC in January delivered record compliance of over 90 percent with its output curbs, according to estimates from the International Energy Agency and figures collected by OPEC's headquarters.

Still, a report by BMI Research said a compliance rate of just 40 percent by Iraq, OPEC's second-biggest producer, "could prove problematic to group cohesion."

Also, Russia and the other non-OPEC producers have delivered smaller cutbacks. The oil minister of Oman, one of the participating non-OPEC countries, said he expected compliance to improve.

CNBC's Tom DiChristopher contributed to this report.