ALSO READOil prices climb after unexpected drop in U.S. crude stocks Oil set for strongest January since 2013; wary of data Oil gains in weekly recovery on equities rebound, weak dollar Oil prices stay near high on strong U.S. refinery runs, China data Oil up modestly ahead of U.S. weekly inventory figures
By Ayenat Mersie
NEW YORK (Reuters) - Oil prices dipped on Wednesday in choppy trade, as a bigger-than-expected U.S. crude stock build pressured prices, but large draws of fuel stocks provided some support.
U.S. crude stocks rose by 5 million barrels, the biggest jump since late January, the U.S. Energy Information Administration (EIA) said. Expectations had been for a 2 million barrel build. The effect was offset somewhat by a larger-than-expected draw on fuel stocks.
"I don't think we have a clear set of directions, and I don't think this (EIA) report gives that much of an insight as to whether the rebalance continues or not. We continue to just chop around here," said Gene McGillian, manager of market research at Tradition Energy.
"We're not pressuring the downside that much. Of course, the reason is because we had some unexpectedly large draws in distillates and gasoline that, when added together, are two times bigger than the crude build," said Bob Yawger, director of energy futures at Mizuho.
OPEC said in its monthly report that supply from non-members is likely to grow by 1.66 million barrels per day (bpd) in 2018, almost double the growth it predicted in November, largely due to rising U.S. supply.[OPEC/M]
The Organization of the Petroleum Exporting Countries also said oil inventories across the most industrialized countries rose in January for the first time in eight months, a sign the impact of its output cuts may be waning. OPEC trimmed its 2018 demand forecast for its own crude by 250,000 bpd to 32.61 million bpd, the fourth consecutive decline.
Commerzbank strategist Carsten Fritsch said that "according to the OPEC report, demand for OPEC's oil must be 33 million barrels per day for the rest of the year to get rid of any remaining oversupply."
Oil prices got a boost early in the session from a broader investor push into commodities after Chinese data showed industrial production in the world's largest importer of raw materials grew more than expected over the first two months of the year.
Oil may also soon get some support from seasonal demand.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)