Gasoline stockpiles fell by 3.3 million barrels last week, well above the 200,000-barrel decline forecast by economists.
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“Signs of rising production from major producers bring bearish signals to the long term market”, said EY Services head of oil and gas Sanjeev Gupta.
The September crude contract for West Texas Intermediate oil fell 55 cents to US$39.51 a barrel.
US West Texas Intermediate (WTI) crude futures were trading at United States dollars 39.77 per barrel at 0350 GMT, up 26 cents from their last settlement but still below the USD 40 marker they settled below for the first time since April in the previous session.
Oil prices rose markedly on Wednesday after several days of losses while weekly figures from the US Energy Department painted a mixed picture.
Some 20 analysts surveyed by Bloomberg said that global oil prices will rebound to an average of $57 a barrel in 2017, but with slow progress. “This is the biggest increase since data began back in 2006, dragging the net long position in WTI to its lowest since February”, said Matt Smith of US -based ClipperData in a note.
International Brent crude futures were trading down 48 cents, or 1.1 percent, at $43.81 per barrel.
Recently, high gasoline supplies have underpinned oil prices as a rise in gasoline inventories suggested that even if more oil was being refined into gasoline, it was not being met with an increase in gasoline demand.
Gasoline supply in the USA dropped by 3.3 million barrels last week, far below the market estimate of a 200,000-barrel decline, US Energy Information Administration (EIA) reported Wednesday. Analysts at the bank last month said crude prices could fall back toward $35 a barrel amid renewed headwinds.
Sagging oil prices notwithstanding, traders kicked off the month on an unfavourable note across most commodities and equity markets.
USA crude output decreased by 55,000 barrels a day to 8.46 million a day, the EIA reported Wednesday.
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The E.I.A. added that the oil stock in the inventory rose by 61 million barrels from the previous year’s total taking it to 521.1 million.
