Oil prices pared gains and at times slipped into negative territory Wednesday as oil stockpiles fell but supplies of gasoline and diesel rose.
U.S. crude futures recently fell 5 cents, or 0.1%, at $51.83 a barrel on the New York Mercantile Exchange -- edging lower from a high of $52.33 a barrel in earlier trading. Brent, the global benchmark, was up 5 cents, or 0.09%, to $57.93 a barrel on ICE Futures Europe.
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The U.S. Energy Information Administration reported that crude inventories fell by 5.7 million barrels last week -- more than the 3.2 million barrels that analysts were expecting, according to a survey by The Wall Street Journal.
But some of that was driven by a sharp but temporary decrease in oil output as offshore producers shut in around Hurricane Nate, which hit the Gulf Coast earlier this month. U.S. production fell nearly 1.1 million barrels a day last week, according to the EIA.
"Normally we would expect the market to have a more positive tone to it, but people are expecting we'll jump back up," said Gene McGillian, research manager at Tradition Energy. "This report is basically being shrugged off because of the effects of Nate."
Much of the draw from oil stockpiles was driven by another big increase in exports of U.S. crude, which rose to 1.798 million barrels a day -- their second highest level on record. Exports have surged in recent weeks as the price difference between U.S. and global crude benchmarks has widened, making it more lucrative to sell U.S. oil overseas.
But some analysts said the high export numbers could become bearish if they weaken the resolve of members of the Organization of the Petroleum Exporting Countries and other major exporters that have been holding production off the market.
"We continue to believe that these levels of U.S. exports...will only increase pressure on Saudi market share in key Asian demand centers such as China, pressuring Saudi's commitment to OPEC production accords over time," Chris Kettenmann, chief energy strategist at Macro Risk Advisors, wrote in a research note.
Also weighing on investors was data showing that refinery utilization fell sharply, from 89.2% to 84.5%, but gasoline inventories still grew by about 900,000 barrels. That could be a sign that demand is due to drop off following the end of summer driving season, analysts said.
Gasoline futures fell 0.67 cent, or 0.41%, to $1.6243 a gallon. Diesel futures fell 1.41 cents, or 0.78%, to $1.7957 a gallon.
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(END) Dow Jones Newswires
October 18, 2017 12:02 ET (16:02 GMT)