Oil handed back some early gains to stand below $80 a barrel on Wednesday, after weekly US data showed a surprise rise in crude stocks in the world's top consumer.
US crude fell 25 cents to $79.28 a barrel this evening, off highs of $80.75 earlier in the session. Brent crude fell 69 cents to $76.93.
The US Energy Information Administration said crude oil stockpiles rose last week by 1.8 million barrels, confounding analysts who had expected yet another drawdown of stocks.
Petrol stocks rose 600,000 barrels while distillates inventories climbed 1.6 million barrels, the EIA said.
Oil has fallen from last Thursday's all-time high of $83.90, which was fuelled by worries of supply outages due to a storm in the Gulf of Mexico, a weakening dollar, US interest rate cuts and an influx of speculative money.
The return of nearly all US Gulf oil production after precautionary closures last week had pushed oil below $80 earlier on Wednesday.
