Investing.com - Oil prices were sharply lower in North American trading on Thursday, extending overnight losses to the weakest level in around a month amid fears that an ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.
The U.S. West Texas Intermediate crude June contract slumped to a session low of $48.68, a level not seen since March 29. It was last at $48.63 by 8:05AM ET (12:05GMT), down 99 cents, or about 2%.
Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London lost $1.06 to $51.34 a barrel, after touching its lowest since March 28 at $51.26 earlier.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 3.6 million barrels in the week ended April 21, a larger draw than expected.
The report also showed that gasoline inventories increased by 3.4 million barrels, disappointing expectations for a drop 1.0 million barrels, as refiners produced more fuel than the market could consume.
Meanwhile, U.S. crude oil production continued its relentless rise, and is now up 10% since mid-2016 at 9.27 million barrels per day, at comparable levels to the peak oil glut between late 2014 and early 2016.
The 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 2.8 cents, or about 1.8%, to $1.555 a gallon, while June heating oil fell 3.2 cents to $1.510 a gallon.
Natural gas futures for June delivery shed 4.1 cents to $3.230 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day.