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Benchmark Brent crude was down 1 percent or 54 cents a barrel at
$54.90 by 1024 GMT. U.S. light crude was down 52 cents at
$52.66.
Weekly inventory data from the American Petroleum Institute
(API) late on Tuesday showed U.S. crude, gasoline and diesel
stocks rose more than expected last week.
The U.S. government's Energy Information Administration (EIA)
reports its own data at 1530 GMT and traders will look to see
whether the official figures confirm the industry's numbers.
"The API report was bearish," said Tamas Varga, senior analyst
at London brokerage PVM Oil Associates. "Expect more pressure on
prices if the EIA shows similar numbers."
Oil prices have found support in recent weeks from plans by the
Organization of the Petroleum Exporting Countries and other
producers to reduce output.
Around 1.5 million barrels per day (bpd) has already been taken
out of the market from about 1.8 million bpd agreed by oil
majors starting on Jan. 1, energy ministers said on Sunday, as
producers look to reduce oversupply.
Bernstein Energy said global oil inventories declined by 24
million barrels to 5.7 billion barrels in the fourth quarter of
last year from the previous quarter. The amount remaining
equates to about 60 days of world oil consumption.
But as OPEC is cutting, U.S. shale output is rising.
U.S. oil production has increased by more than 6 percent since
mid-2016, although it remains 7 percent below its 2015 peak.
Output is back to levels reached in late 2014, when strong U.S.
crude output contributed to a crash in oil prices.
President Donald Trump's promise to support the U.S. oil
industry has encouraged analysts to revise up their forecasts of
growth in U.S. oil production, which is already benefiting from
higher prices.
A push by Republicans in the U.S. House of Representatives for a
shift to border-adjusted corporate tax could help propel U.S.
crude prices higher than global benchmark Brent, triggering
large-scale domestic production, according to Goldman Sachs.
(Additional reporting by Dmitry Zhdannikov in London and Naveen
Thukral in Singapore; Editing by Dale Hudson and David Evans)
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