U.S. West Texas Intermediate (WTI) crude futures decreased by 79 cents, or 1.1%, to $74.33 a barrel at 0
Analysts polled by Reuters expected crude stocks to fall by 2.2 million barrels and distillate stocks to drop by 500,000 barrels.
The large increase in U.S. inventories in the API estimates has dragged down oil prices and the risk of recession is also capping the oil price uptrend in the short run, said analyst Leon Li at CMC Markets.
Traders will be looking out for inventory data from the U.S. Energy Information Administration due later on Wednesday to see if it matches the preliminary view from API.
The oil market has been pulled lower by worries about U.S. interest rate hikes to curb inflation which would trigger a recession and curtail fuel demand.
The prevailing market sentiment is bearish on the demand side with China is still dealing with widespread COVID-19 outbreak and the U.S. and Europe at risk of an economic slowdown because of rising interest rates, with supply disruptions minimal for the time being, Claudio Galimberti, a senior vice president at Rystad Energy, said by email.
503 GMT, while Brent crude futures fell by 75 cents, or 0.9%, at $79.35 a barrel.
Both contracts rose during trading on Monday and Tuesday, rebounding from a sharp selloff in the first week of 2023.
U.S. crude oil stockpiles jumped by 14.9 million barrels in the week ended Jan. 6, sources said, citing data from the American Petroleum Institute (API). At the same time, distillate stocks, which include heating oil and jet fuel, rose by about 1.1 million barrels.
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