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Oil prices mixed; WTI hit by US inventory build

Crude oil prices closed mixed Wednesday, with the US benchmark futures contract falling on news of a further build in oil inventories in the United States, the world's biggest consumer of crude.

New York's main contract, West Texas Intermediate (WTI) for March delivery, settled at $97.01 a barrel, down 50 cents from Tuesday's close.

In London trade, Brent North Sea crude for delivery in March rose six cents to finish at $118.72 a barrel, scoring a gain in the wake of rising European equities markets.

The US Department of Energy's closely watched weekly oil inventories report showed the nation's stockpiles continued to build last week, by 600,000 barrels.

More than 11 million barrels were added to supplies over the prior three weeks.

WTI, which had opened the session in positive territory, sharply fell after the US report.

However, the report also showed that crude oil reserves at the Cushing, Oklahoma terminal, which have been building because of a distribution problem, had fallen.

"The fact the Cushing inventory declined quite a bit may let people think that it is moving in the right direction," said Michael Lynch of Strategic Energy and Economic Research.

Earlier in the day, the International Energy Agency, in its monthly report, said that US crude oil production averaged more than seven million barrels a day in January, the highest level since November 1992.

According to preliminary estimates, production was up by 910,000 barrels a day compared with January 2012, thanks in part to the development of non-conventional hydrocarbon sources, including shale.

Total US oil output increased by almost one million barrels a day in 2012, to 9.1 million barrels, according to the report.