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 The U.S. Energy Information Administration reported that U.S. crude
stocks rose 3.5 million barrels to 397.6 million barrels, the
highest levels since records began in 1982. The market had expected
a build, and prices had tumbled on Tuesday.
Brent crude for June delivery settled 16 cents lower at $109.11. On
Tuesday, Brent had ended 68 cents lower on in its biggest daily drop
in two weeks.
U.S. crude for June delivery settled 31 cents lower at $101.44 a
barrel. On Tuesday, U.S. crude tumbled more than 2 percent as the
May contract expired, its steepest decline in nearly four months.
"I think they're (EIA numbers) pretty bearish especially when you
consider that refinery runs surged strongly in the Gulf Coast by
almost 400,000 barrels per day (bpd) and imports were down and we
still had a huge build (there)," said Dominick Chirichella, Senior
Partner at Energy Management Institute.
"Part of it was built into the market yesterday so today was a bit
anticlimactic. Prices were supported a little bit because we had
another draw in Cushing," he said, referring to the Cushing,
Oklahoma delivery point for the U.S. crude contract.
A slide in U.S. crude earlier in the day widened its discount to
Brent to the biggest in a month. But prices recovered after the
spread between the two benchmarks held its 200-day moving average of
$8.18 a barrel. The moving average is a key technical indicator
watched by traders.
Last week's peace deal in Ukraine formally ended on Wednesday as the
government said an "Easter truce" was over, vowing to eliminate
pro-Russian armed groups in the east of the country.
The crisis in Ukraine has supported oil prices due to fears Western
powers may increase sanctions against Russia, the world's
second-largest crude exporter.
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China, the world's second-biggest oil consumer, reported a fourth
straight monthly downturn in factory activity, but analysts also saw
initial signs of stability due to government efforts to underpin
growth.
"China is slowing down and that's a concern, but people don't expect
it to fall off a cliff," said Tony Nunan, an oil risk manager at
Mitsubishi Corp.
"Geopolitical concerns over Ukraine, unfinished issues such as Syria
and Libya, are keeping prices supported."
The euro zone's private sector has started the second quarter on its
strongest footing in nearly three years, surveys showed on
Wednesday, led by growth in Germany this month after a slight
slowdown in March.
Investors are also keeping an eye on Libya's progress in ramping up
exports. The North African nation's oil production is around 220,000
barrels a day as several oilfields remain closed due to protests, a
spokesman for state-run National Oil Corp said.
(Additional reporting by David Sheppard in Lonodon and Manash
Goswami in Singapore; editing by Dale Hudson, Keiron Henderson,
Chris Reese and David Gregorio)
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