Investing.com - West Texas Intermediate oil futures trimmed overnight losses in North America trade on Wednesday, rallying off the lowest levels of the session after data showed that oil supplies in the U.S. fell more than expected last week.
However, elevated stocks of fuel products amid slowing demand growth is expected to keep prices under pressure.
Crude oil for September delivery on the New York Mercantile Exchange shed 12 cents, or 0.26%, to trade at $45.33 a barrel by 14:36GMT, or 10:36AM ET. Prices were at around $45.05 prior to the release of the inventory data after falling to a daily low of $44.55.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 2.3 million barrels in the week ended July 15. Market analysts' expected a crude-stock decline of 2.1 million barrels, while the American Petroleum Institute late Tuesday reported a supply drop of 2.3 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, rose by 189,000 barrels last week, the EIA said.
Total U.S. crude oil inventories stood at 519.5 million barrels as of last week, which the EIA considered to be “historically high levels for this time of year”.
The report also showed that gasoline inventories increased by 0.9 million barrels, disappointing expectations for a decline of 0.8 million barrels, while distillate stockpiles decreased by 0.2 million barrels.
U.S. oil has been under pressure in recent sessions amid signs of an ongoing recovery in U.S. drilling activity. According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. increased by six last week to 357, the third straight weekly rise and the sixth increase in seven weeks.
The renewed gain in U.S. drilling activity fueled speculation that domestic production could be on the verge of rebounding in the weeks ahead, underlining worries over a supply glut.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for September delivery dipped 15 cents, or 0.32%, to $46.51 a barrel, after sliding to an intraday low of $45.90, amid ongoing concerns over a global supply glut.