Crude oil futures were lower during mid-morning trade in Asia Thursday following the release of last week's US inventory levels, which showed a build in US crude stocks for the fifth consecutive week.
At 10:33 am Singapore time (0233 GMT), the December ICE Brent crude futures moved 53 cents/b (0.69%) lower from Tuesday's settle at $75.64/b, while NYMEX December light sweet crude contract was 46 cents/b (0.69%) lower at $66.36/b.
Data released Wednesday by the US Energy Information Administration showed that total commercial crude inventories for the week ended October 19 were up 6.35 million barrels to 422.79 million barrels.
While market participants were looking for a build last week, the degree of the build exceeded estimates analysts surveyed Monday by S&P Global Platts, as they were looking for US crude stocks to have increased by 5.46 million barrels. "Crude oil prices come under pressure late in the session, wiping out gains achieved earlier in the day. The market chose to ignore the bigger than expected rise in US inventories last week, " ANZ analysts said in a note.
The losses were, however, capped by signs of strong demand in the US with US distillate stocks falling 2.26 million barrels to 130.38 million barrels, while gasoline stocks dropped 4.83 million barrels to 229.33 million barrels, EIA data showed.
"This came as utilisation rates of refiners rose strongly, suggesting the maintenance season is rapidly coming to an end as they prepare to service the strong demand, " added the ANZ analysts, referring to the drop in product inventory.
While the market had expected a post-Hurricane Michael rebound in product demand to lead stocks lower, the gasoline draw far exceeded analysts' expectations of a 1.5 million-barrel decline last week.
US crude producing levels on the other hand held steady at 10.9 million b/d last week, according to EIA data, despite a return of offshore US Gulf of Mexico production shut-in earlier by Hurricane Michael.
Meanwhile, market participants would also closely look out for developments around the Iranian sanctions in terms of exports and production volumes from Saudi Arabia and Russia.
As of 0233 GMT,the US Dollar Index was down 0.13% at 96.035.
