The net result of the demand slowdown and increased imports was the first rise in crude oil stocks since early August. The API showed crude stocks up a sharp 6.3 million barrels last week to 323 million barrels, increasing the year-on-year surplus by about five million barrels to 21 million barrels.

The report showed a sharp 236,000 barrels per day (bpd) drop in crude runs to 14.8 million bpd, bringing the total slow down in national refinery runs to nearly a million bpd since mid-August.

Also, it showed a sharp turnaround in crude imports, which were up at nearly 10 million bpd last week, compared with about eight million bpd the previous week, which was likely weather-related analysts said.

"We had lower refinery runs,which confirms that we are entering a lower demand tied to seasonal refinery maintenance...that contributed to the big build," said Richard Redash, an oil analyst at Prudential Securities in New York.

He noted that the market reaction would be muted because of expectations that this week's Hurricane Georges, which ripped through the Gulf coast over the last few days, would have a disruptive effect which probably would keep exports down again in this week's numbers.

"Georges began to kick in late last week and its effects are not in the latest API data...its effects will be in next week's data," Redash said.

The huge build in distillate stocks -- consisting mainly of heating oil and diesel -- continued and was up over two million barrels last week to 152 million barrels, the highest it has ever been at this time of year and well above previous peaks in October and November. But traders took some solace from the gasoline numbers, which showed a strong 1.8 million barrel drop and a high "implied demand"for this late in the season.

"Gasoline demand was particularly strong. People think that gasoline demand ends at the end of the summer but it doesn't. It often catches people out," said Thomas Blakeslee, a trader at Eildon Associates.

However, though the recent firmness in the markets has sent crude prices to their highest since May, traders generally expect the sharp drop in crude which preceded Tuesday's figures to be shortlived and to go into reverse as disruptions abate and crude export levels increase, especially from the North Sea.