Oil tumbles 2 percent after unexpected U.S. crude, gasoline stock build

By Barani Krishnan

NEW YORK (Reuters) - Oil prices tumbled more than 2 percent on Wednesday, hitting a two-month low, after the U.S. government reported a surprise build in crude and gasoline inventories during the peak summer driving season.

The U.S. Energy Information Administration said domestic crude stockpiles rose 1.7 million barrels, against analysts' forecasts for a drawdown of 2.3 million barrels.

Brent was down $1.03, or 2.4 percent, at $43.83 a barrel by 11:04 a.m. EDT (1504 GMT) after hitting $43.62 earlier, its lowest since May 10.

WTI crude fell 90 cents, or 2 percent, to $42.02 a barrel. It slid earlier to $41.93, its lowest since April 20.

"A drop in refinery runs at the peak of summer driving season indicate refiners are dialing back amid faltering profit margins," said Matt Smith, analyst at New York-based oil cargoes tracker Clipperdata.

Refinery crude runs fell 277,000 barrels per day last week as utilization rates fell 0.8 percentage point to 92.4 percent of capacity, EIA data showed.

(Additional reporting by Karolin Schaps in LONDON, Stine Jacobsen in OSLO and Henning Gloystein in SINGAPORE; Editing by David Goodman and Marguerita Choy)