LONDON (Reuters) - Oil fell toward $75 a barrel in volatile trade on Wednesday after a U.S. government report showed a larger than expected rise in crude stockpiles in the world’s top consumer.
U.S. crude stocks rose by 1.9 million barrels, the Energy Information Administration said in its latest weekly report, more than analysts expected. Gasoline supplies, expected to rise, declined by 2.8 million barrels.
“There’s still lots of crude around, and demand’s not that great. Demand’s improving overall, but there’s still a lot of product out there,” said Kyle Cooper of IAF Advisors in Houston.
U.S. crude for delivery in June fell $1.15 to $75.22 a barrel as of 1532 GMT, having fallen to as low as $74.91 earlier in the session. Brent crude was down 11 cents at $80.38.
Oil gained support earlier in the session from a stronger euro relative to the dollar and rising equities. Spain became the latest euro zone country to unveil austerity measures, easing concerns over euro-zone sovereign debt woes.
The EIA report released at 1430 GMT (10:30 a.m. EDT) also said inventories at Cushing, Oklahoma, the hub for NYMEX crude deliveries, rose again, adding to already record high levels. Stocks at Cushing have depressed U.S. crude relative to Brent.
The EIA report followed that of industry group the American Petroleum Institute, which said on Tuesday crude stocks rose by a less-than-expected 362,000 barrels and gasoline stocks posted a surprise drop of 906,000 barrels.
Demand has been slow to catch up with ample supply.
The International Energy Agency (IEA) on Wednesday trimmed its oil demand forecast. Global demand growth this year will be 50,000 barrels per day (bpd) lower than expected, the IEA, adviser to 28 industrialized countries, said in a report.
Oil prices have been volatile since the European Union announced a rescue package for the bloc’s debt-stricken nations totaling almost $1 trillion two days ago.
U.S. crude had touched $87.15 on May 3, its highest level in almost 19 months, in response to expectations global economic recovery would boost demand after two straight years of declines.
Additional reporting by Alejandro Barbajosa in Singapore and Reuters energy desk in New York; editing by Barbara Lewis