By Nicole Friedman 

NEW YORK--U.S. oil prices pared gains but continued to trade higher Wednesday after weekly inventory data showed U.S. stockpiles of crude oil and petroleum products at a new record high.

Crude-oil stockpiles increased by 3.1 million barrels to 461 million barrels, marking a second week of increases, the U.S. Energy Information Administration said. Analysts surveyed by The Wall Street Journal had predicted supplies would rise by 2.5 million barrels on the week.

Gasoline supplies also rose, but stockpiles of distillates, including heating oil and diesel fuel, fell.

Total supplies of crude oil and petroleum products rose by 2.3 million barrels to 1.3 billion barrels, a record in EIA data going back to 1990.

Oil prices traded in a narrow range in September as investors assessed how long the global glut of crude oil--which sent prices plunging in the past year--would persist. While production has started falling in the U.S., supporting prices, robust output from other areas and ongoing concerns about consumption kept prices subdued last month.

In addition, traders were cautious about piling into the market because oil demand typically declines at this time of year as refineries perform seasonal maintenance.

Refineries ran at 87.5% of capacity last week, compared with 89.8% of capacity the prior week, the EIA said. Refinery maintenance was especially heavy in the Midwest, leading to an unexpected increase in crude-oil supplies in the key storage hub of Cushing, Okla.

Lower refinery demand in the Midwest also pushed more crude into storage facilities along the Gulf Coast.

"The crude-oil market has to be concerned as they continue to see these very large week-on-week Gulf Coast crude-oil inventory builds, because it's certainly not sustainable through the end of the year," said Andy Lipow, president of Lipow Oil Associates in Houston.

Light, sweet crude for November delivery recently rose 24 cents, or 0.5%, to $48.77 a barrel on the New York Mercantile Exchange, after briefly turning negative following the EIA data release. Brent, the global benchmark, traded up 43 cents, or 0.8%, at $52.35 a barrel on ICE Futures Europe.

Brent rose above $50 a barrel on Tuesday for the first time in about a month, after the U.S. Energy Information Administration lowered its U.S. oil-production forecasts for 2015 and 2016, while raising its global demand forecasts for the same period.

The U.S. benchmark neared the psychologically important level as well but pared its gains after the EIA data.

"Since August, with very few exceptions...the price stood under $50, so it is very significant," said Eugen Weinberg, head of commodities research at Commerzbank. "Some investors, who are waiting at the moment on the sidelines, might pour their money back into oil and commodities markets."

Gasoline futures recently fell 1.3% to $1.4174 a gallon. Diesel futures fell 0.1% to $1.6094 a gallon.

Ese Erheriene contributed to this article.

Write to Nicole Friedman at nicole.friedman@wsj.com

 

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(END) Dow Jones Newswires

October 07, 2015 11:29 ET (15:29 GMT)

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