Investing.com - Oil prices reversed overnight gains in North American trading on Wednesday, sliding to a fresh five-week low after data showed a lower than expected drawdown in U.S. oil stockpiles.
The U.S. West Texas Intermediate crude June contract shed 17 cents, or around 0.3%, to $47.51 a barrel by 10:35AM ET (14:35GMT) after falling to $47.34, a level not seen since March 27. Prices were at around $47.98 prior to the release of the inventory data.
Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London dipped 22 cents to $50.23 a barrel, after sliding to $50.14 in the prior session, its deepest trough since March 27.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 930,000 barrels in the week ended April 28.
Market analysts' expected a crude-stock decline of 2.3 million barrels, while the American Petroleum Institute late Tuesday reported a supply-drop of 4.1 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 728,000 barrels last week, the EIA said.
Total U.S. crude oil inventories stood at 527.8 million barrels as of last week, which the EIA considered to be at the upper limit of the average range for this time of year.
The report also showed that gasoline inventories increased by 191,000 barrels, compared to expectations for a gain of 1.3 million barrels.
For distillate inventories including diesel, the EIA reported a decline of 562,000 barrels.
Crude has been under pressure in recent weeks amid fears that an ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance global oil supply and demand.
U.S. drillers last week added rigs for the 15th week in a row, implying that further gains in domestic production are ahead. The U.S. rig count rose by 9 to 697, extending an 11-month drilling recovery to the highest level since August 2015.
The relentless increase in U.S. output has overshadowed pledged output cuts by major producers.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day between January and June, but so far the move has had little impact on inventory levels.
A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.
Elsewhere on Nymex, gasoline futures for June slumped 2.3 cents, or 1.5%, to $1.512 a gallon, while June heating oil slipped 0.6 cents to $1.461 a gallon.
Natural gas futures for June delivery inched up 1.2 cents to $3.207 per million British thermal units.