USA crude oil inventories climbed by 1.3 million barrels in the week that ended February 1 to 447.21 million barrels, data from the Energy Information Administration (EIA) showed on Wednesday. Later in the year, it expects markets to remain fairly balanced due to a combination of waivers expiring for importers of Iranian oil, and because of a roll-over of the OPEC+ agreement into H2 2019.
Earlier, oil price came under pressure following weekly data showing rise in USA stocks. Still, "more hard work is needed to turn this market unreservedly bullish".
U.S. energy firms last week cut the number of oil rigs operating to their lowest in eight months as some drillers followed through on plans to spend less on new wells this year.
Crude prices tumbled more than 3% early in the day after Russian Energy Minister Alexander Novak poured cold water over Saudi Arabia's hopes, as reported by the Wall Street Journal, to lure Moscow and the group of 10 non-OPEC oil producers it leads into a formal pact with the Organization of the Petroleum Exporting Countries to better manage oil prices.
Analysts said that USA sanctions on Venezuela had focused market attention on tighter global supplies. -China meetings next week ahead of a March 1 deadline for trade tariffs to rise. The contract increased 35 cents to $54.01 on Wednesday. Brent was up more than one percent and trading at $64.40 a barrel as of 10:49am GMT.
A formal OPEC+10 joint structure, as suggested in the WSJ report earlier this week, would only lead to additional red tape and the risk of USA sanctions against monopolies, Novak added, TASS said.
United States distillate stocks fell by 2.3 million barrels, while inventories of other refined fuels dropped by 2.9 million barrels. A week earlier, gasoline inventories fell by 2.2 million barrels after four weekly builds, and hefty ones, at that, with production averaging 9.9 million bpd.
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Meanwhile US WTI crude rose to $55.53.
Adding to the bearish sentiment, CNBC reported that a meeting between President Donald Trump and his Chinese counterpart Xi Jinping was "highly unlikely" before the March 1 deadline set by the USA for reaching a trade deal.
While OPEC and allied producers are slashing their output in an attempt to boost crude prices, which saw a rapid fall a year ago, the United States has been opposing the measure and vowed to continue expanding its supply.
Venezuela, which produced 1.15 million barrels per day in December, was forced to look for alternative clients for its crude oil following sanctions that prevent the state oil company PDVSA from exporting to the US unless the revenues are paid to opposition leader Juan Guaido.
Traders are watching how long a partial closure of the Keystone oil pipeline would last after the discovery of a possible leak in the area of St. Louis Missouri. Both lines carry Canadian crude to the U.S.
Meanwhile, imports are set to drop further as the U.S. slapped sanctions on Venezuelan state oil company PDVSA.
Opec's sales to the world's biggest economy fell 22 per cent month-on-month and 37 per cent year on year, to 1.4m barrels per day, data from energy intelligence company Kpler shows.