NEW YORK (Reuters) - U.S. crude futures fell more than 1 percent on Wednesday after a surprise build in stockpiles while gasoline rallied on bets for strong fuel demand through the peak summer driving season.
The U.S. Energy Information Administration said inventories rose last week for crude, gasoline and distillates. That surprised market players a day after industry group the American Petroleum Institute had reported a draw of 1 million barrels. Analysts polled by Reuters had forecast a crude draw of 700,000 barrels.
“We were not supposed to be building crude inventories in early July. This tells me the data will be additive to the macro-based selloff and perhaps make it worse,” said David Thompson, executive vice president at Powerhouse, an energy-specialized commodities broker in Washington.
Earlier this week, oil prices tumbled to three-month lows on worries about the impact of Greece’s debt woes and China’s stock market plunge on the world economy and fuel demand.
Oil prices also felt pressure from Iran’s eagerness to seal a nuclear accord that will allow it to resume crude exports without sanctions into an already glutted global market.
U.S. crude’s front-month contract CLc1 settled down 68 cents, or 1.3 percent, at $51.65 a barrel. It had fallen on Tuesday to $50.58, its lowest since April 8.
Brent LCOc1 settled up 20 cents, or 0.4 percent, at $57.05, bucking the trend in U.S. crude for a second straight day.
Gasoline was the day’s outlier, rallying 2.5 percent. The gasoline crack CL-RB1=R, or profit refiners get for producing the fuel from crude, hit a 3-month high as U.S. crude prices went the opposite way.
“The forward WTI is making new lows and is starting to look cheap if you have a longer-term time horizon,” Thompson said, referring to the widening discount between nearby and farther-dated in the benchmark U.S. West Texas Intermediate crude. <0#CL:>
In China, the world’s second-largest oil consumer, the stock market fell again, with the country’s securities regulator speaking of “panic sentiment” among investors.
Greece, meanwhile, has been given until Sunday to come up with sweeping reforms for loans and to stay with the euro currency.
“Turmoil in China and Greece may put recent robust demand growth at risk,” Morgan Stanley’s oil analysts wrote.
In Vienna, nuclear talks between Iran and six global powers went beyond Tuesday’s deadline. Market bulls fear an onslaught of Iranian crude supply from sanctions being lifted if a nuclear deal goes through.
Additional reporting by Alex Lawler and Libby George in London and Henning Gloystein in Singapore; Editing by David Gregorio and Tom Brown