Oil prices were largely flat on Wednesday as traders weighed record U.S. production against threats to shipping in the Red Sea from militants.
U.S. crude rose 28 cents, or .38%, to settle at $74.22 a barrel, while Brent gained 47 cents, or .59%, to settle at $79.70 a barrel.
Oil prices were up more than 1% earlier as traders continued to worry about disruption to shipping in the Red Sea as militants attack vessels. But supply and demand concerns returned later in the day as U.S. data showed record U.S. production and rising inventories.
Crude inventories rose by 2.9 million barrels in the week to Dec. 15 to 443.7 million barrels, compared with analysts' expectations in a Reuters poll for a 2.3 million-barrel drop.
EIA also said U.S. crude output rose to a record 13.3 million barrels per day last week, up from the prior all-time high of 13.2 million bpd.
U.S. gasoline stocks rose by 2.7 million barrels in the week to 226.7 million barrels, EIA said, compared with analysts' expectations in a Reuters poll for a 1.2 million-barrel rise.​
Washington on Tuesday launched a task force to safeguard Red Sea commerce as attacks by Iran-backed Yemeni militants forced major shipping companies to reroute, stoking fears of sustained disruptions to global trade.
The Houthis vowed to defy a U.S.-led naval mission and to keep targeting Red Sea shipping in support of Palestinian enclave Gaza's ruling Hamas movement.
About 12% of world shipping traffic passes up the Red Sea and through the Suez Canal. However, the impact on oil supply has been limited so far, analysts said, as the bulk of Middle East crude is exported via the Strait of Hormuz.
The U.S. bought 2.1 million barrels of crude for delivery in February, its Energy Department said on Tuesday, bringing total purchases to about 11 million barrels as it continued to replenish the Strategic Petroleum Reserve after the largest sale in history last year.
S&P Global Commodity Insights said looking ahead, the U.S. is producing more oil than any country in history, leading strong non-OPEC+ supply growth that will more than meet growing global demand in 2024.
U.S. total liquids production in fourth quarter stands at 21.4 million barrels per day, of which 13.3 million bpd is crude and condensate, the firm added.
"Not only is the United States producing more oil than any country in history, but the amount of oil (crude oil, refined products and natural gas liquids) that it is exporting is near the total production of Saudi Arabia or Russia," Jim Burkhard, a vice president at S&P Global said in a note.
-- CNBC's Spencer Kimball contributed to this report.