The Energy Information Administration said on Wednesday that crude inventories, excluding the Strategic Petroleum Reserve, rose 3.2 million barrels in the week to Oct. 26, less than analyst forecasts for a 4.1 million-barrel build.
Much of that increase was in the Midwest, where stocks at the Cushing, Oklahoma, delivery hub rose 1.9 million barrels, the EIA said. That was also the sixth straight week of builds at the delivery point for US crude futures.
Net US crude imports fell last week by 639,000 barrels per day, as exports rose 305,000 bpd.
Oil prices rose after the data, with US heating oil prices leading the energy complex higher after a big decline in inventories.
"Bullish draws to the products have acted as a counterweight to bearish sentiment ... half of today's crude build was contributed from another SPR release," Matt Smith, director of commodity research at ClipperData.
The US Department of Energy (DOE) said in August it would offer 11 million barrels of oil for sale from the nation's Strategic Petroleum Reserve (SPR) ahead of sanctions on Iran that are expected to reduce global supplies of crude. The delivery period for the proposed sale of sour crudes is from Oct. 1 through Nov. 30.
Winners for the sale include ExxonMobil, Marathon Petroleum and Phillips 66, according to a notice from the DOE in early September.
Traders said the SPR barrels have been hitting the market this month and data showed stockpiles in the SPR fell by about 1.6 million barrels last week, the biggest weekly drop since December 2017.
"PADD 3 stocks fell by 1 million barrels. It would've fallen by 2.5 million if not for the SPR," one trader said.
Inventories in the Gulf Coast, or PADD 3 region, fell by 1.1 million barrels to 218.5 million last week.
Distillate stockpiles, which include diesel and heating oil, fell 4.1 million barrels, versus expectations for a 1.4 million-barrel drop, the EIA data showed.
Gasoline stocks fell 3.2 million barrels, compared with analysts' expectations in a Reuters poll for a 2.1 million barrel drop.
Refinery crude runs rose by 149,000 bpd as utilization rates rose by 0.2 percentage point to 89.4 percent of total capacity.
U.S crude production rose 300,000 bpd to 11.2 million bpd, the weekly record high reached early October.