Oil prices dropped on Thursday after the U.S. government reported an unexpected increase in crude and gasoline stockpiles, but an increase in refining runs and a drawdown in distillates helped prices bounce off session lows.
The data also showed distillate stocks in the U.S. Gulf fell to a one-year low, while overall refining rates rose in the latest week, led by a jump in East Coast refining, which is operating at a record 99.8 percent of capacity. Increased refining rates could eventually reduce crude inventories.
On Tuesday, the IEA cut its oil demand growth forecast by 100,000 barrels per day (bpd) for both 2017 and 2018. That could mean world oil consumption may not breach 100 million bpd next year as many had expected.
Also, supplies are likely to exceed that level, particularly as U.S. production continues to rise. U.S. crude oil production has jumped more than 14 percent since mid-2016 to 9.65 million bpd and is expected to grow further.
The IEA said non-OPEC production would rise 1.4 million bpd in 2018, undermining efforts by the Organization of the Petroleum Exporting Countries and other producers to limit global crude supplies and support prices.
Indian Crude Oil ended at Rs 3603 per barrel, down 0.50%. The prices tested a high of Rs 3628 per barrel and a low of Rs 3582 per barrel.