Global oil markets fell on Wednesday after the bullish impact from a sharp drawdown in U.S. crude inventories was offset by large builds in gasoline that raised concerns about high autumn fuel supplies.
Also weighing on crude were Colonial Pipeline’s efforts to fix an outage on one of its lines that had been supporting prices of gasoline, and the larger oil complex, since Tuesday.
Brent, the global benchmark Brent for oil, was down 60 cents at $49.48 a barrel by 12:08 p.m. (1608 GMT).
U.S. crude traded down $1.10 at $45.25.
Gasoline was down 1.3 percent after hitting 2-week highs earlier.
Crude prices had initially rallied nearly 2 percent, with Brent briefly breaking above $50 a barrel, after the U.S. government reported a drawdown of about 2 million barrels for a second week in a row.
“The crude numbers were not a big surprise in any way,” said Tariq Zahir, managing member at Tyche Capital Advisors in Laurel Hollow, New York.
“A draw we did see but there was also a bigger-than-expected build in gasoline. The bottom line is we think any rallies, if we do see them, will be short lived and we will sell into them,” said Zahir, who is an oil bear.
Analysts polled by Reuters had forecast a decrease of just 533,000 barrels last week. Industry group American Petroleum Institute had, meanwhile, projected a draw of 3.7 million barrels, larger than the numbers put out by the EIA.
The U.S. government agency also said gasoline stockpiles rose 1.4 million barrels, compared with the Reuters poll which called for a 819,000-barrel gain.
On the East Coast, which includes the New York Harbor delivery point for U.S. gasoline and ultra-low sulfur diesel (ULSD) futures, distillate inventories rose to 59 million barrels, the highest level for this time of year since 2011, EIA data showed.