Oil futures pared earlier losses on Thursday after U.S. government data showed that crude supplies fell for a fourth week in a row.
Data showed that oil production, however, climbed in the latest week.
July crude was down 41 cents, or 0.7%, to $57.10 U.S. a barrel on the New York Mercantile Exchange. Prices were trading at $56.66 before the supply data.
July Brent crude on London’s ICE Futures exchange fell nine cents, or 0.2%, to $61.98 U.S. a barrel, also paring losses after the U.S. data.
The U.S. Energy Information Administration on Thursday reported a fall of 2.8 million barrels in crude supplies for the week ended May 22. That was bigger than the 1.8-million-barrel decline expected by analysts polled by Platts. The American Petroleum Institute late Wednesday reported an increase of 1.3 million barrels.
Gasoline supplies declined by 3.3 million barrels, while distillate stockpiles rose 1.1 million barrels last week, according to the EIA. Analysts polled by Platts forecast a fall of 1.5 million barrels for gasoline supplies and a fall of 720,000 barrels for distillate inventories.
On Nymex, June gasoline was up 2.2 cents, or 1.1%, at $1.966 U.S. a gallon, while June heating oil traded at $1.86 U.S. a gallon, up less than half a cent.
Oil production in the lower 48 states climbed to 9.08 million barrels a day in the latest week, from 8.87 million a week earlier, the EIA data showed. Including Alaska, output was 9.57 million barrels a day versus 9.26 million.
Signs that low oil prices were starting to affect U.S. oil production and inventories were among the key factors that supported bullish price sentiment and helped oil prices rally in recent weeks.
But market observers have been divided over the sustainability of U.S. oil production at current prices and the direction that oil prices eventually will take, so futures prices are likely to be volatile in coming months.
The Organization of the Petroleum Exporting Countries’ meeting is set for June 5 "with little indication of a shift away from its current supply policy," BNP Paribas said in a report.
