NEW YORK (Reuters) - Oil stayed negative on Wednesday after U.S. inventory data showed an unexpected fall in crude inventories, while refined products stocks rose and demand weakened.
U.S. crude fell $1.04 to $37.94 a barrel by 12:19 p.m. EST, down from a session high of $39.69.
London Brent crude fell $1.32 to $39.04 a barrel.
The latest batch of data from the U.S. government's Energy Information Administration showed a 3.1 million barrel fall in crude stocks, countering expectations of a 400,000 barrel rise.
Gasoline stockpiles rose by 3.3 million barrels, more than the build of 500,000 barrels predicted by analysts, and distillates, including heating oil, rose by 1.8 million barrels versus expectations for a 200,000 barrel increase.
Demand, which has been destroyed by economic weakness, sank again. Distillate consumption slipped by 5.1 percent over the past four weeks compared with the same time a year ago and gasoline demand fell by 2.7 percent.
Earlier in the session, oil prices had sunk to a session low of $36.63 in anticipation of the U.S. data.
They were also sapped by weak equities markets following a negative close in New York on Tuesday and falls in Asia and Europe earlier on Wednesday.
U.S. equities edged higher after their market opening on Wednesday.
Analysts have predicted the oil market will stay bearish following a more than 70 percent drop from a record above $147 in July.
"Until the price is low enough to break through the cloud of economic doom and gloom, oil is going to be under some pressure," said Mike Fitzpatrick of MF Global in New York.
The Organization of the Petroleum Exporting Countries (OPEC) has already announced cuts of around 5 percent in global oil supplies and may call an emergency meeting before March if prices extend their near $110-per-barrel slide since summer, OPEC's President Chakib Khelil said on Tuesday.
(Additional reporting by Joe Brock & Fayen Wong in Perth; editing by Marguerita Choy)
