OTTAWA (Dow Jones)--Oil futures pared losses Wednesday after the U.S. government said crude stockpiles at key hub Cushing sank last week, despite overall inventories soaring to 16-year highs. Light, sweet crude for May delivery was down $1.14, or 2.1%, at $52.84 a barrel on the New York Mercantile Exchange, after popping above $53 a barrel soon after the data release. May Brent crude on the ICE futures exchange was $1.31 lower at $52.19 a barrel. In the week ended March 20, U.S. crude oil inventories jumped 3.3 million barrels to 356.6 million, the highest since July 1993, the Energy Information Administration reported in its weekly data release. Analysts surveyed by Dow Jones Newswires had forecast an increase of 1.3 million barrels. However, stockpiles at the Nymex delivery point in Cushing, Okla., fell 2.2 million barrels and the market found further support from lower inventories of oil products. Gasoline stocks were down 1.1 million barrels and distillates - which include heating oil and diesel - fell 1.6 million barrels. "The report looks kind of mixed, but the market seems to be looking at that drop in Cushing and ignoring the fact that the total's up so high," said Gene McGillian, an analyst at Tradition Energy in Stamford, Conn. "They're interpreting the report as not bearish enough to shake us out of the rally we've been in all week." While swelling inventories and woeful demand numbers have hampered previous efforts to push higher, crude prices have staked out a higher trading range in recent days, closing above $50/bbl in the previous four sessions, as OPEC production cuts filter through to global supplies. Major stimulus actions from the Federal Reserve have also weakened the dollar, propelling crude prices higher as investors seek a hedge against inflation and a safer haven amid economic turbulence. The greenback came under further pressure Wednesday after Treasury Secretary Timothy Geithner said he is open to considering a new global reserve currency, though he added that the dollar will likely remain the world's dominant reserve currency "for a long period of time." Crude prices are also finding support in U.S. equity markets, which were buoyed by unexpected gains in the U.S. durable goods report and the first increase in new-home sales for seven months. Front-month April reformulated gasoline blendstock, or RBOB, was down 1.61 cents, or 1.1%, to $1.4865 a gallon. April heating oil was 1.64 cents lower at $1.5040 a gallon. -By Hyun Young Lee, Dow Jones Newswires; 613-237-0669; hyunyoung.lee@dowjones.com

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