OREANDA-NEWS. February 20, 2015. Oil prices recovered much of their early losses Thursday after weekly stock builds turned out to be less than some had feared, although the U.S. government reported another record high in crude inventories.

Traders said U.S. crude futures were also seeing short-covering ahead of the expiry of its front-month contract.

Brent was down 20 cents at \\$60.33 a barrel by 2:22 p.m. EST (1818 GMT), after falling as low as \\$57.80 earlier. On Tuesday, it had hit a two-month high of \\$63.

U.S. crude settled down 98 cents at \\$51.16, off the session low of \\$49.15. The front-month March contract in U.S. crude will expire on Friday.

"I think traders are rolling their March shorts into April giving the market a false sense of (short term) strength," said a broker.

U.S. commercial crude oil inventories rose 7.7 million to a record 425.6 million barrels last week, the sixth straight week that levels were at a seasonal record peak, the Energy Information Administration (EIA) said.

The build was more than double the 3.2 million barrels expected by analysts in a Reuters poll, but way below the 14.3 million barrels estimated by industry group American Petroleum Institute (API) late Wednesday.

Benchmark Brent and U.S. crude futures, which fell about 5 percent on Wednesday after release of the API numbers, came off their session lows on the EIA data.

"It is still a bearish number though it provides a little bit of a relief rally if you'd been going with the API estimate," Tariq Zahir, managing member at New York's Tyche Capital Advisors said, explaining why the market pared losses.

Zahir said he expected prices to remain under pressure though. "Builds are probably going to be even higher next week from refinery outages for maintenance."