Oil falls 2% as U.S. refiners ramp up output, equities retreat | Reuters

Oil falls 2% as U.S. refiners ramp up output, equities retreat | Reuters

Oil prices reversed course and fell over 2% on Wednesday after government data showed U.S. refiners ramped up output, easing worries of a supply crunch, and as traders took cues from a drop in equities market.

Brent crude was down $2.41 cents, or 2.4%, at $109.52 a barrel at 12:05 a.m. ET (1605 GMT), while U.S. West Texas Intermediate (WTI) crude fell $2.5 cents, or 2.2%, to $1 09.85 a barrel.

Brent settled below WTI on Tuesday - the first time since May 2020 - and was still unusually trading at a discount due to strong export demand and tightening U.S. crude stockpiles.

U.S. crude inventories (USOILC=ECI) fell by 3.4 million barrels last week, government data said, an unexpected drawdown as refiners ramped up output in response to tight product inventories and near-record exports that have forced diesel and gasoline prices to record levels in the United States.

Capacity use on both the East Coast and Gulf Coast was above 95%, putting those refineries close to their highest possible running rates.