UPDATE 7-Oil prices edge lower after U.S. fuel inventories build

* U.S. crude stockpiles fall by 3.1 mln bbls in latest week
-EIA
* Benchmarks lost more than 3% on Tuesday
* Iran says it came to help of foreign oil tanker in the
Gulf

(Updates prices, market activity)
By Stephanie Kelly
NEW YORK, July 17 (Reuters) - Oil futures fell on Wednesday,
extending a more than 3% drop in prices the previous session,
after U.S. government data showed large builds in refined
product stockpiles.
Brent crude LCOc1 futures slipped 24 cents to $64.11 a
barrel by 12:48 p.m. EDT (1648 GMT). U.S West Texas Intermediate
(WTI) crude CLc1 futures fell 40 cents to $57.22 a barrel.
Both benchmarks shed more than 3% on Tuesday.
While data on Wednesday from the U.S. Energy Information
Administration showed a larger-than-expected drawdown in crude
stockpiles last week, large builds in refined product
inventories kept prices lower.
U.S. crude inventories USOILC=ECI fell 3.1 million
barrels, EIA data showed, more than analysts' forecasts for a
decrease of 2.7 million barrels. Gasoline stocks USOILG=ECI rose 3.6 million barrels,
compared with analysts' expectations in a Reuters poll for a
925,000-barrel drop. Distillate stockpiles USOILD=ECI grew by
5.7 million barrels, much more than expectations for a
613,000-barrel increase, the EIA data showed.
"The focus this time of year is gasoline, and that data
point was squarely bearish," said John Kilduff, a partner at
Again Capital Management in New York.
Some of the EIA data was affected by Storm Barry, which came
ashore on Saturday in central Louisiana as a Category 1
hurricane. More than half of daily crude production in the Gulf
of Mexico remained offline on Tuesday, the Bureau of Safety and
Environmental Enforcement (BSEE) said, as most oil companies
were re-staffing facilities to resume production. The U.S. drilling regulator said 1.1 million barrels per day
of oil, or 58% of the region's total, remained shut.
Oil prices slumped on Tuesday on increased hopes for a
return of Iranian crude to the global oil market after U.S.
President Donald Trump said progress had been made with Tehran,
signaling tensions could ease in the Middle East.
However, Iran later denied it was willing to negotiate over
its ballistic missile programme, contradicting a claim by U.S.
Secretary of State Mike Pompeo, and appearing to undercut
Trump's statement. "It is hard to believe that either the United States or the
Iranian stance would change drastically, therefore yesterday's
sell-off might turn out to be an excellent buying opportunity,"
PVM analysts wrote.
U.S. officials say they are unsure whether an oil tanker
towed into Iranian waters was seized by Iran or rescued after
facing mechanical faults as Tehran asserts, creating a mystery
at sea at a time of high tension in the Gulf. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
U.S. crude inventories, weekly changes since 2017 png https://tmsnrt.rs/2XlX17b
TECHNICALS-Brent oil may retest support at $63.84 L4N24I0BQ
TECHNICALS-U.S. oil may retest support at $56.98 L4N24I0NL
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