LONDON – Crude oil prices rose on Wednesday, but prices were volatile after U.S. stock data sent the market mixed signals on the state of fuel inventories in the world's number one energy consumer.
U.S. light sweet crude for September delivery rose 35 cents to $59.55 a barrel on the New York Mercantile Exchange (search) after falling as much 60 cents following the release of stock data.
London Brent crude rose 24 cents to $58.27 a barrel.
U.S gasoline inventories (search) fell by 2.1 million barrels amid peak summer driving season demand, far exceeding an 800,000 barrel fall expected among analysts polled by Reuters.
But distillate inventories rose for the tenth consecutive week. The rise of 2.7 million barrels in the week to July 22, exceeding by a million barrels expectations for a rise of 1.7 million barrels among analysts polled by Reuters.
Distillates have long been the focus of the oil markets amid concern that refiners would struggle to meet growing diesel demand when it combines with winter demand for heating oil later. Distillate stocks include both diesel and heating oil.
Crude stocks fell 2.3 million barrels, as expected.
"It looks supportive for gasoline, bearish for distillate and neutral for crude," said Kyle Cooper, analyst at Citigroup Global Markets. "It shows that refiners are still putting out enough product to meet demand."
Concerns about potential supply disruptions were sparked again on Wednesday after a fire destroyed Indian Oil and Natural Gas Corp's (search) 100,000 barrels-per-day Bombay High Platform on Wednesday.
Production will be down for several months. Up to 300 people may be trapped at the facility.
Prices have rebounded from a low of near $56 a barrel a week ago as dealers feared further disruptions to U.S. supplies in the Gulf of Mexico from an unusually early Atlantic storm season.
The Gulf of Mexico (search) is home to a quarter of U.S. domestic production and key import terminals.
The storm season, which lasts until November, has already cut about 6 million barrels of U.S. Gulf output.
The Organization of the Petroleum Exporting Countries (search) (OPEC) has been powerless to restrain the surge in oil prices of over 35 percent since the start of the year.
OPEC is pumping at its highest rate since late 1979, but says it can do nothing to address the shortage of refining capacity in consuming countries that is keeping prices high.