Oil steadies as U.S. crude stocks draw but fuel inventories rise

NEW YORK (Reuters) - Oil futures steadied on Wednesday after U.S. government data showed a drawdown in domestic crude stocks but rises in refined product inventories, while lingering worries about the global economy weighed on the market.

FILE PHOTO - Oil tankers are seen at a terminal of Sinopec Yaogang oil depot in Nantong, Jiangsu province, China June 11, 2019. REUTERS/Stringer

Brent crude futures LCOc1 rose 27 cents to settle at $60.30 a barrel, down from a session high of $61.41.

U.S. West Texas Intermediate (WTI) crude CLc1 fell 45 cents to settle at $55.68 a barrel, after hitting $57.13 a barrel.

Prices pared gains after data from the Energy Information Administration showed bigger-than-expected builds in U.S. fuel inventories last week. Gasoline stocks USOILG=ECI rose by 312,000 barrels, while distillate supplies USOILD=ECI grew by 2.6 million barrels.

Crude stockpiles USOILC=ECI decreased 2.7 million barrels, a bigger drawdown than the 1.9 million barrels that analysts had forecast.

“Both gasoline and distillate apparent demand remains anemic with little improvement expected before years end,” said Jim Ritterbusch, president of Ritterbusch and Associates.

Tensions between the United States and Iran remained in focus. Iranian President Hassan Rouhani said that if Iran’s oil exports are cut to zero, international waterways would not have the same security as before, cautioning Washington against tightening pressure on Tehran.

The comment coincided with a remark by Iranian Foreign Minister Mohammad Javad Zarif that Tehran might act “unpredictably” in response to U.S. policies under President Donald Trump.

Uncertainty over the global economic outlook amid the U.S.-China trade war weighed on the market.

“Crude oil remains stuck, with the relief rally in recent days not removing the fear that recession risks could still send the market lower again,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Traders were also watching this week’s annual U.S. central bank seminar in Jackson Hole, Wyoming, where comments from Federal Reserve Chief Jerome Powell will be in focus.

“Market players continued to fret over recession fears and sluggish oil demand forecasts,” said Stephen Brennock of oil broker PVM. “A reprieve, however, may be on the cards tomorrow ... expectations are running high that hints of impending monetary stimulus will be plentiful.”

Additional reporting by Noah Browning in London and Jessica Jaganathan in Singapore; Editing by Marguerita Choy and David Gregorio