Investing.com - Oil prices pared back gains on Thursday, as an unexpectedly large build in gasoline and distillates stockpiles offset a larger-than-forecast drawdown in U.S. crude inventories, according to a report released by the U.S. Energy Information Administration.
U.S. crude oil was up 10 cents or 0.8% at $53.36 a barrel at 11.05 ET from around $53.89 ahead of the report.
Global benchmark Brent futures were at $56.58 as barrel, up 13 cents or 0.23% from $57.09 earlier.
Crude oil inventories fell by 7.05 million barrels in the week to December 30, the EIA said.
That was compared to forecasts for a stockpile drawdown of 2.15 million barrels after a build of 0.61 million barrels in the previous week.
But stockpiles of gasoline and distillates saw big gains, with gasoline stockpiles rising by 8.3 million barrels and distillates stocks increasing by 10.05 million barrels.
There was 1.07 million barrel increase at the Cushing, Oklahoma delivery hub for U.S. crude, the EIA said.
The report came after an American Petroleum Institute report showing that U.S. crude inventories fell by 7.4 million barrels last week to stand at 482.7 million barrels.
Analysts had expected a decline of just 2.2 million barrels.
Meanwhile, traders continued to ponder a planned output cut by major producers, which came into effect on January 1, aimed a draining a global supply glut and rebalancing markets.
Oil prices rose earlier after Reuters reported that Saudi Arabia has started talks about reducing crude exports in order to comply with an agreement by the Organization of the Petroleum Exporting Countries to cut output.
Oil prices had also received a boost from the weaker dollar. Oil is priced in U.S. dollars and becomes cheaper to holders of other currencies when the dollar weakens, underpinning demand.