Oil prices swung between gains and losses on Wednesday, as investors evaluated steady demand for oil products against a larger-than-expected build in crude stockpiles.
Light, sweet crude for March delivery were recently up 14 cents, or 0.2%, to $64.64 a barrel on the New York Mercantile Exchange, after trading as low as $63.67 earlier in the session. Brent, the global benchmark, traded near flat at $69.02 a barrel.
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On Wednesday, the U.S. Energy Information Administration reported that the amount of crude in storage rose by 6.8 million barrels in the week ended Jan. 26, exceeding analyst forecasts on average for a 1.8 million barrel build.
The number also surpassed the American Petroleum Institute estimates for a 3.2 million barrel increase, and marked the first weekly build after 10 consecutive weeks of declines.
"We're seeing refinery maintenance season kicking in with a vengeance here," said Matt Smith, director of commodity research at ClipperData. "It seems like we're set for potentially some builds going forward."
As refiners stop processing crude into products like gasoline and diesel, stockpiles tend to pile up. However, draws in product stockpiles painted a positive picture for demand, analysts noted. Last week, gasoline stockpiles fell by 2 million barrels and distillates dropped 1.9 million barrels.
"A bit of that bearish sentiment has been eased though by the draws we've seen to the products," Mr. Smith said.
Signs of a ramp-up in U.S. shale output have also limited gains recently, analysts said.
"Global oil balances are gradually tightening in the short-term, but in the medium term, shale and other unconventional oil sources impose a $65 a barrel soft ceiling," said Ehsan Khoman, head of research for the MENA region at Bank of Tokyo-Mitsubishi UFJ Ltd.
According to the EIA, U.S. crude production hit a fresh weekly record last week, hitting 9.9 million barrels a day.
Geopolitical risks in the Middle East, which MUFG estimate have added a $5 to $8 a barrel premium to oil prices, "may likely wind down in the near term," Mr. Khoman added.
Gasoline futures rose 0.5% to $1.9050 a gallon and diesel futures fell 0.1% to $2.0694 a gallon.
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(END) Dow Jones Newswires
January 31, 2018 12:49 ET (17:49 GMT)