Oil prices fell more than 1% on Wednesday, settling at two-week lows on pressure from concerns of a possible global oil glut, but data showing signs of strong U.S. demand for fuel limited losses.

Brent crude futures closed 92 cents, or 1.43%, lower at $63.52 a barrel, while U.S. West Texas Intermediate crude settled 96 cents, or 1.59%, low at $59.60.

Oil prices fell following U.S. government data that showed an increase in crude inventories last week.

"A rebound in imports and subdued refining activity amid seasonal maintenance has encouraged a build to U.S. crude inventories," said Kpler lead Americas oil analyst Matt Smith.

U.S. STOCKS BUILD MORE THAN EXPECTED

U.S. crude stocks rose by 5.2 million barrels to 421.2 million barrels last week, the Energy Information Administration said, compared with analysts' expectations for a 603,000-barrel rise. [EIA/S]

However, signs of stronger-than-expected gasoline demand limited oil price losses. Gasoline inventories fell by 4.7 million barrels last week to 206 million barrels. Analysts had expected a 1.1 million-barrel draw.

Canadian Prime Minister Mark Carney's budget plan, unveiled on Tuesday, signalled that Canada could scrap a cap on oil and gas emissions, fuelling concerns over a potential supply glut.

"Canada could ditch their controversial oil and gas emissions strategy and unleash more oil," said Phil Flynn, senior market analyst with Price Futures Group.

The Organization of the Petroleum Exporting Countries and allied producers, a group known as OPEC+, agreed on Sunday to increase output by 137,000 barrels a day in December. It decided to pause further increases in the first quarter of 2026.

Kazakhstan's crude oil production, excluding gas condensate, declined 10% last month to 1.69 million barrels per day, still above the OPEC+ output quota, according to an industry source and Reuters calculations.

Russia's Black Sea port of Tuapse has suspended fuel exports, while its oil refinery halted crude processing after Sunday's Ukrainian drone attacks on its infrastructure, according to two industry sources and LSEG ship tracking data.

Source: Investing.com