Oil fell 1% after a smaller-than-expected decline in US inventories

Although losses were limited by supply risks in the Middle East and Libya, oil prices fell 1% on Wednesday as a smaller-than-expected draw in US crude inventories and lingering worries about Chinese demand.

Brent crude was down 90 cents, or 1.13%, at $78.65 a barrel. U.S. West Texas Intermediate (WTI) crude futures were down $1.01, or 1.34%, at $74.52.

Prices fell more than 2% on Tuesday, after rising 7% in the previous three days, to Brent above $81 and WTI above $77.

U.S. crude inventories fell by 846,000 barrels last week to 425.2 million barrels, 2,000 barrels less than analysts polled by Reuters had expected for consumption. Refining activity picked up during the week.

“If refining activity was actually at a six-week high, it’s a little surprising to see such a small oil withdrawal,” said Matt Smith, lead oil analyst at Kpler. “Continued strength in imports and decline in exports helped keep the withdrawal under control,” he added.

Demand concerns from China continue to weigh on prices, as recent data points to a struggling economy and declining demand for oil from refineries.