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By Arathy Somasekhar
HOUSTON (Reuters) - Oil prices dipped on Wednesday on a bigger-than-expected rise in U.S. crude inventories and record production in the world's biggest producer.
Brent futures were down 94 cents to $81.58 a barrel at 11:12 a.m. ET (16:12 GMT). U.S. West Texas Intermediate (WTI) crude was down $1.20 to $77.09.
U.S. crude stocks rose by 3.6 million barrels in the last week to 421.9 million barrels, according to the U.S. Energy Information Administration (EIA), far exceeding analysts' expectations in a Reuters poll for a 1.8 million-barrel rise. [EIA/S]
U.S. domestic crude production stayed at a record 13.2 million barrels per day, the data showed.
In an indication of strong demand, gasoline stocks saw a surprise draw of 1.5 million barrels, while diesel stocks drew more than expected at 1.4 million barrels.
EIA released data for 2 consecutive weeks on Wednesday, after a delay last week due to a systems upgrade.
American Petroleum Institute figures on Tuesday had showed rising crude oil and gasoline inventories last week, according to market sources.
Weighing on demand however was China's oil refinery throughput that eased in October from the previous month's highs amid weakening industrial fuel demand and narrowing refining margins.
Still, the country's economic activity perked up in October as industrial output increased at a faster pace and retail sales growth beat expectations, an encouraging sign for the world's second-largest economy.
The International Energy Agency joined the Organization of the Petroleum Exporting Countries and its allies (OPEC+) in raising oil demand growth forecasts for this year, despite projections of slower economic growth in many major countries.
"With China being a scapegoat for much of the world's lack of industrial demand, this glimmer of light ought to aid oil's progress but the reluctance is so far winning out," John Evans of oil broker PVM said in a note.
Downward pressure on oil prices may come from the supply side, with the United States "likely at peak production for crude," while the delayed release of its oil data makes the investment situation more opaque, Evans said.
The Financial Times reported on Wednesday that Denmark will be tasked with inspecting and potentially blocking tankers with Russian oil sailing through its waters under new European Union plans, as the West explores more ways of enforcing a price cap on Moscow's crude.
However, it is still to be seen how Denmark will enforce this.
Elsewhere, the European Union reached a deal on Wednesday on a law to place methane emissions limits on Europe's oil and gas imports from 2030, pressuring international suppliers to clamp down on leaks of the potent greenhouse gas.
(Reporting by Arathy Somasekhar in Houston, Paul Carsten in London and Sudarshan Varadhan and Laura Sanicola; Editing by Raju Gopalakrishnan, Mark Potter, Jane Merriman, Emelia Sithole-Matarise, Alexandra Hudson)
