NEW YORK, Oct 7 (Reuters) - Oil fell in volatile trading on Wednesday, snapping a three-day rally, after U.S. government data showing a large crude inventory build surprised traders the day after an industry group had reported a draw.
The U.S. Energy Information Administration (EIA) said domestic crude inventories rose 3.1 million barrels last week, more than the 2.2 million-barrel build forecast by analysts in a Reuters survey.
Just on Tuesday, preliminary inventory data by the American Petroleum Institute had suggested a drawdown of 1.2 million barrels..
Brent, the global crude benchmark, settled down 59 cents, or 1.1 percent, at $51.33 a barrel.
The West Texas Intermediate (WTI) benchmark for U.S. crude slid 72 cents, or 1.5 percent, to settle at $47.81.
Brent and WTI had gained around 8 percent, or about $4 a barrel, over the past three days, breaking above a month-long trading range on technical buying and supportive data.
The rally was partly fueled by an EIA report on Tuesday that projected global oil demand for 2016 will grow by the fastest rate in six years, suggesting a crude surplus was easing quicker than expected.
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