Oil eases after US data shows large builds in fuel stocks

Oil prices edged lower on Wednesday after U.S. data showed larger-than-expected inventories of gasoline and diesel, adding to supply concerns amid global trade tensions and ongoing OPEC+ output increases.

Brent crude futures were down 28 cents to $65.35 a barrel by 10:44 a.m. EDT (1444 GMT). U.S. West Texas Intermediate crude fell 8 cents to $63.33.

Crude inventories dropped by 4.3 million barrels last week, the Energy Information Administration said on Wednesday, compared with analysts' expectations in a Reuters poll for a draw of 1 million barrels.

However, U.S. gasoline stocks rose by 5.2 million barrels versus an estimate for a rise of 600,000 barrels, while distillate stockpiles rose by 4.2 million barrels compared with expectations for a rise of 1 million barrels.

"The report is in my view bearish, due to large builds in refined products," Giovanni Staunovo, an analyst with UBS.

"There was a strong increase in refinery demand for crude, resulting in a large crude draw. But post-Memorial Day, the strong supply increase with weaker implied demand resulted in large refined product inventory increases," he added.