Oil reverses losses on unexpected U.S. product draws
By Simon Falush and Julia Payne
LONDON (Reuters) - Brent crude futures trimmed earlier losses, popping above $112 on Wednesday, supported by a larger than expected drop in U.S. gasoline inventories.
Any bounce was capped, however, by political turmoil in the debt-laden euro zone and a jump in U.S. crude stocks to the highest level since 1990.
Brent crude was up 5 cents to $112.78 a barrel by 1551 GMT, having fallen to as low as $113.31 earlier. Brent had been dropping for a sixth straight session, its longest losing streak since the middle of 2010.
U.S. crude was at $96.54 down 47 cents.
The official weekly inventory data from the U.S. Energy Information Administration (EIA) showed gasoline inventories dropped by 2.61 million barrels in the week to May 4, compared with analysts' forecast for a 100,000 barrel draw.
The data also showed an unexpected fall in distillate stocks, which includes heating oil and diesel. Distillate stockpiles fell 3.25 million barrels, against expectations for a 100,000 barrel build.
"The products numbers were bullish and that is somewhat helping to turn tide in crude," said Addison Armstrong, director of market research at Tradition Energy.
However, an increase U.S. crude stocks, ample production from Saudi Arabia and the struggling eurozone economy have also helped push Brent down from levels near $126 per barrel in April. Continued...