NEW YORK, Jan 5: US crude oil futures rebounded by midday on Thursday despite government data showing a larger-than-expected increase in domestic distillate and gasoline supplies.

Crude oil stocks fell within market expectations.

February crude futures were up 18 cents at $63.60 a barrel at 1716 GMT on the New York Mercantile Exchange.

NYMEX February heating oil traded 1.17 cents lower at $1.806 per gallon, while February gasoline gained 2.25 cents to $1.807 a gallon.

NYMEX February natural gas was down 56.7 cents at $9.63 million British thermal units after a surprise storage increase.

In London, February Brent crude was up 21 cents at $61.89 a barrel.

“If you exclude the natural gas number, the report is not all that bearish,” said Phil Flynn, analyst at Alaron Trading in Chicago. “Even with the build today, gasoline stocks are still in the lower half of the average range. The market is no longer focused on the winter heating season but on the potential tight squeeze in gasoline.”

The US Energy Information Administration said US crude oil stocks fell 1 million barrels to 321.6 million barrels in the week to Dec. 30, reducing the surplus from a year ago to 35.7 million barrels.

Imports fell 131,000 barrels per day to 10.1 million bpd, while refinery runs rose 1 percentage point to 89.9 per cent of capacity.

Analysts polled by Reuters had forecast a 1.2 million barrel draw in crude and a 0.4 percentage point rise in runs. Distillate stocks, which include heating oil, rose 2.1 million barrels to 128.9 million barrels, or 2.8 million barrels above last year. Analysts expected a 700,000-barrel build.

Gasoline supplies gained 1.4 million barrels to 204.3 million barrels, reducing the deficit from a year ago to 12.9 million barrels. Analysts had forecast an increase of only 400,000 barrels.

Over the last four weeks, motor gasoline demand has averaged 9.3 million barrels per day, or 1 per cent above the same period last year.—Reuters