U.S. crude oil futures on Wednesday rebounded from an 11-week low and five days of losses as the market shrugged off government data showing across-the-board rises in crude oil and product inventories last week.
Oil traders instead looked for guidance from Wall Street, where losses were curbed and from firmer heating oil futures.
Oil prices found their footing after five straight days of losses racked up amid worries that the economic recovery was stalling and with it keep oil demand sluggish.
U.S. crude for October delivery was up 64 cents at $72.28 a barrel at 1:58 p.m. EDT, after earlier falling as low as $70.76, the lowest price since early June.
October ICE Brent rose 88 cents to $73.26 a barrel.
Disappointing economic data earlier weakened equities, but a rebound on a broad market index, the S&P 500, after a five-day decline helped to buffer Wall Street's losses.
"Despite weak economic data and the bearish builds in the EIA inventory report, crude oil futures have not fallen ... as they are attached to what's going on in the stock market," said Richard Ilcyzysyn, senior market strategist at Lind Waldock in Chicago.
"Crude futures also appear short-term oversold and may be poised for a rebound," Ilczyszyn added.
Heating oil futures also rose back from a five-day losing streak, even though total distillate stockpiles were up sharply last week.
"In terms of market psychology, September heating oil futures had something to do with crude futures holding up at this point," said Tim Evans, energy analyst at Citi Futures Perspective in New York.
Analysts emphasized that, with the summer driving season winding down, the energy markets were looking to shift focus on heating oil futures ahead of the winter.
"It's that time of the year when traders begin selling gasoline and buying heating oil," said Ilcyszyn.
In New York, September delivery heating was up 2.98 cents at $1.9655 a gallon, after ending at a near seven-week low on Tuesday.
Data from the U.S. Energy Information Administration showed crude inventories rose 4.11 million barrels in the week to August 20, dwarfing a forecast for a build of 200,000 barrels.
However, crude oil inventories at the key Cushing, Okla., delivery hub fell 779,000 barrels to 36.3 million barrels, about the only bullish feature in the weekly report.
Gasoline inventories were 2.27 million barrels higher, at odds with forecasts of a small drawdown. Distillate stocks increased by a higher than expected 1.76 million barrels.
In aggregate, commercial crude and product stocks rose to 1.139 billion barrels last week, topping the record weekly high of 1.13 billion barrels set in the week to August 13.
Oil futures got hammered earlier from data showing that sales of new U.S. single-family homes slumped to the slowest pace on record in July. That came on top of a private sector report on Tuesday that sales of previously owned homes in the same month plunged to their slowest pace in 15 years.
A separate government report on Wednesday showed that orders for long-lasting U.S. manufactured goods, excluding transportation equipment, posted their biggest decline in 1-1/2 years in July.
Also adding to the earlier bearish backdrop, forecasters revised downwards their expectations of the oil price both for this year and next, a Reuters poll revealed earlier on Wednesday.
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