Oil snapped a four-day gain after an industry report showed a large build in U.S. crude and gasoline stockpiles, reviving demand concerns.
Futures in New York fell as much as 0.8% after rising 3.7% over the past four days amid an easing of trade tensions between the U.S. and China.
The American Petroleum Institute reported crude inventories swelled by 4.7 million barrels last week and gasoline stockpiles expanded by 5.6 million barrels, according to people familiar with the data.
That would be the largest gasoline build since January if confirmed by official government figures due Wednesday.
Crude has rallied almost 10% this month as the Organization of Petroleum Exporting Countries and its allies agreed to deeper-than-expected output cuts and the world’s two largest economies announced a limited trade deal.
However, forecast increases in production next year from non-OPEC countries may keep a lid on price gains.
“There’s more room for oil prices to fall,” said Victor Shum, vice president of energy consulting at IHS Markit Ltd. in Singapore.
Strong supply growth from Brazil, Canada, Norway and Guyana will exceed demand expansion next year, he said.
West Texas Intermediate crude for January delivery, which expires Thursday, fell 41 cents, or 0.7%, to $60.53 a barrel on the New York Mercantile Exchange as of 12:07 p.m. in Singapore.
The contract finished up 1.2% on Tuesday at $60.94, the highest close since Sept. 16. The more-active February contract traded 42 cents lower at $60.45.
Brent for February settlement declined 0.5% to $65.79 a barrel on the London-based ICE Futures Europe Exchange after climbing 1.2% Tuesday.
The global benchmark crude traded at a $5.32 premium to the WTI for the same month.
If the API data is confirmed by the Energy Information Administration figures, it would be the largest weekly increase in U.S. crude stockpiles since early November.
Analysts surveyed by Bloomberg had forecast a 1.75 million barrel drop in inventories.
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