Forexpros - Crude oil futures pared sharp losses on Wednesday, pulling back from the daily low after a government report showed that U.S. crude oil and gasoline inventories declined last week, easing concerns over a slowdown in demand from the world's largest oil consumer.
On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD80.78 a barrel during U.S. morning trade, shedding 0.63%.
It earlier fell as much as 1.8% to trade at a daily low of USD79.77 a barrel.
The contract traded at USD80.37 prior to the release of the Energy Information Administration data.
The U.S. EIA said in its weekly report that U.S. crude oil inventories fell by 5.2 million barrels in the week ended August 5, confounding expectations for a 1.5 million barrel increase.
U.S. crude supplies snapped two consecutive weeks of gains, after rising by 1.0 million barrels in the preceding week.
Total U.S. crude oil inventories stood at 349.8 million barrels as of last week, remaining slightly above the upper limit of the average range for this time of year.
Total motor gasoline inventories decreased by 1.6 million barrels, after rising by 1.7 million barrels in the preceding week and confounding expectations for a 0.9 million barrel increase.
Energy traders have been closely eyeing gasoline stockpiles in recent weeks to gauge the strength of demand as the U.S. driving season was in its peak gasoline demand period.
Meanwhile, prices were weighed by a broadly stronger U.S. dollar. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.92% to hit 74.71.
Also Wednesday, the International Energy Agency warned that global oil demand growth could more than halve if the global economy grew slower than expected in 2012.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery slipped 0.21% to trade at USD104.50 a barrel, up USD23.72 on its U.S. counterpart.
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