WTI oil futures trim losses after U.S. supplies fall more than expected

Investing.com - West Texas Intermediate oil futures trimmed losses on Thursday, after data showed that oil supplies in the U.S. fell for the fourth consecutive week last week.

On the New York Mercantile Exchange, crude oil for July delivery hit an intraday low of $56.53 a barrel, the weakest level since April 29, before trading at $57.00 during U.S. morning hours, down 51 cents, or 0.89%. Prices were at around $56.67 prior to the release of the inventory data.

The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories fell by 2.8 million barrels in the week ended May 22, compared to expectations for a drop of 0.9 million barrels.

The report also showed that supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, declined by 433,000 barrels last week.

Total U.S. crude oil inventories stood at 479.4 million barrels as of last week.

U.S. oil futures have been under pressure in recent sessions amid indications that the sharp decline in U.S. drilling activity in recent months may be nearing an end.

According to industry research group Baker Hughes (NYSE:BHI), the number of rigs drilling for oil in the U.S. fell by only one last week to 659.

Oil traders have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.

However, the rate of decline has slowed in recent weeks, fuelling concerns that some shale oil companies will dial up their output in the months ahead if prices stabilize near current levels.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery lost 15 cents, or 0.22%, to trade at $61.91 a barrel after touching a daily low of $61.30, a level not seen since April 15.

London-traded Brent prices have been weighed by record OPEC production in recent sessions. The Organization of Petroleum Exporting Counties is expected to keep production levels unchanged when it meets on June 5, despite ongoing concerns over ample global supplies.

The spread between the Brent and the WTI crude contracts stood at $4.91 a barrel early on Thursday, compared to $4.55 by close of trade on Wednesday.