Oil prices continued to plummet on Wednesday, at times as much as 2%, after data showed large weekly builds in U.S. petroleum products offset a surprise draw in crude stockpiles.
Both Brent and WTI rose briefly after the U.S. Energy Information Administration (EIA) reported that crude inventories fell 559,000 barrels during the week ended Sept. 9. Analysts looked for a build of 3.8 million barrels.
But the EIA also reported that inventories of distillates, which include diesel and heating oil, rose by 4.6 million barrels last week, versus analysts' expectations of an increase of 1.5 million barrels. That build lowered broader market sentiment, forcing crude futures to reverse gains.
Gasoline stocks rose by 567,000 barrels, compared with analysts' expectations for a 343,000-barrel gain.
Crude prices tumbled on Tuesday after the International Energy Agency (IEA) reported slowing oil demand growth amid growing inventories and supplies could indicate that the market will be oversupplied through at least the first half of 2017.
The Organization of the Petroleum Exporting Countries has also pointed to a larger surplus next year due to new fields in non-member countries. U.S. shale drillers are proving more resilient than expected to cheap crude, OPEC added.
Experts said that the delay in re-balancing is largely due to a rise in production from OPEC members and that the market would be balanced already if OPEC had maintained its production at May's levels.
Brent crude futures were down 76 cents, or 1.6%, at $46.34 U.S. per barrel at noon ET Wednesday. U.S. West Texas Intermediate futures fell 85 cents, or 1.9%, to $44.05 U.S. a barrel.
