Oil prices were little changed on Wednesday as investors weighed an unexpected jump in U.S. crude stockpiles against optimism that a fast rollout of a coronavirus vaccine would fuel a recovery in global oil demand.
Prices fell 1% earlier in the session as data showed U.S. crude inventories rose by 15.2 million barrels to 503.2 million barrels last week, according to the Energy Information Administration, compared with analysts' expectations in a Reuters poll for a 1.4 million-barrel drop.
U.S. net imports of crude oil rose by 2.7 million barrels per day last week, the biggest increase on record, as exports plunged.
However, the advent of mass inoculations in Canada and the United Kingdom and the prospect of the U.S. Food and Drug Administration approving a coronavirus vaccine pushed markets higher following the report.
"The market is definitely in a state of shock, but overall this is looking like a fluke report and the market can detect brighter days ahead," said John Kilduff, partner at Again Capital LLC in New York.
A panel of outside advisers will vote on Thursday on whether to recommend the FDA issue an emergency authorization for the use of the vaccine developed by Pfizer Inc and German partner BioNTech SE.
Britain began mass vaccinations on Tuesday. Expectations that others will soon follow helped offset fears about a sharp rise in coronavirus cases globally that has led to new restrictions on movements around the world, reducing demand for transportation fuel.
U.S. gasoline and distillate stockpiles were markedly higher last week as refineries boosted output.
"The significant increase in gasoline and distillate inventories is likely a result of lower oil demand post the Thanksgiving holiday, as well as additional stay at home measures across country," said Andrew Lipow, president of Lipow Oil Associates in Houston.