Oil prices slipped Wednesday, after the U.S. government reported that crude oil inventories climbed last week while heating oil and gasoline inventories fell.

The drops in product inventories were larger than anticipated, but the market wasn't too rattled, given that the report indicated that refiners are boosting production and fuel demand is still going strong.

Light sweet crude for December delivery edged 2 cents lower to settle at $58.71 a barrel Wednesday on the New York Mercantile Exchange. Brent crude for December on London's ICE futures exchange rose 5 cents to settle at $58.98 a barrel.

According to the U.S. Energy Information Administration's weekly report Wednesday, U.S. crude oil inventories rose by 2 million barrels to 334.3 million barrels in the last week.

That was largely due to crude imports bouncing back up by 599,000 barrels per day from the previous week, when imports dropped off significantly.

Inventories of distillates, which include heating oil and diesel fuel, fell by 2.7 million barrels to 141.3 million barrels. Gasoline inventories fell by 2.8 million barrels to 204.6 million barrels. Furthermore, the EIA said demand for these products has recently accelerated.

But refineries operated at nearly 89 percent capacity, up more than 2 percent from the previous week _ showing that refiners can boost production going forward, said Peter Beutel of Cameron Hanover. Refiners had pulled back on production over the last couple months, since dropping energy prices lowered profit margins.

Phil Flynn, analyst at Alaron Trading Corp., said there is also some pressure on prices due to this week's soft U.S. economic data _ such as the Institute for Supply Management's manufucturing index, which on Wednesday indicated that growth is at its slowest pace in three years. Soft economic data suggests demand could weaken.

A Dow Jones Newswires survey of analysts forecast crude stocks would rise 2.5 million barrels, while distillate inventories were expected to fall by 1.3 million barrels. The survey also forecast a 1.1 million barrel draw in gasoline stocks.

On Nymex Wednesday, heating oil futures fell 1.55 cents to close at $1.6515 a gallon. Gasoline futures rose 3.57 cents to settle at $1.4630 a gallon. Natural gas futures rose 17.8 cents to settle at $7.712 per 1,000 cubic feet.

On Monday, crude-oil futures declined by more than $2 a barrel amid mild weather on the East Coast.

"The market has no real headlines to drive it, and the weather forecast for the Northern Hemisphere winter is on the warm side," which will keep prices around $57-$58 a barrel, said Victor Shum, an energy analyst at Purvin & Gertz in Singapore. A sudden cold snap, however, would bump up fuel demand and prompt a price spike, he said.