Brent crude oil futures reversed earlier gains to trade around $65.4 per barrel after a surprise build in US crude inventories.
The EIA reported a 1.328 million barrel increase in crude stocks, defying expectations for a 1.85 million barrel draw.
Gasoline and distillate inventories also rose, against forecasts for declines.
Earlier, WTI oil prices had climbed to $66 on geopolitical concerns after reports that Israel may be preparing to strike Iranian nuclear facilities, raising fears of disruption in Middle East supply.
Tensions remain high as Iran could retaliate by threatening oil shipments through the Strait of Hormuz.
Meanwhile, ceasefire talks between the US and Russia over Ukraine have stalled, adding to global uncertainty.