Oil steadies as demand fears counter sudden U.S. crude stocks drop

Oil prices were mixed on Wednesday as doubts about demand in Europe offset hopes for U.S. refinery activity recovery as U.S. crude inventories unexpectedly declined last week.

Brent crude futures slid 0.1%, or 7 cents, at $68.32 per barrel after initially rising by 23 cents. U.S. West Texas Intermediate crude futures climbed 4 cents to $64.84 after gaining nearly 28 cents in early trade.

Both benchmarks saw choppy trading on Wednesday with the two swinging between negative and positive territory. 

Oil futures trading is now as heavy as it was at the onset of the pandemic. While U.S. and Indian oil demand is recovering, Europe’s remains weak. French road fuel consumption dropped by 10.8% year-on-year in February.

Meanwhile, U.S. crude stocks dropped by 1 million barrels in the week ended March 12, contrary to analysts’ expectations for a 3-million barrel build. 

Gasoline stocks dropped by 926,000 barrels, less than the expected 3-million barrel drawdown.