Investing.com - West Texas Intermediate oil futures turned negative in North American trade on Thursday, after data showed that oil supplies in the U.S. fell less than expected.
Crude oil for July delivery on the New York Mercantile Exchange lost 57 cents, or 1.20%, to trade at $46.88 a barrel by 15:04GMT, or 11:04AM ET compared to $47.82 ahead of the report.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 2.223 million barrels in the week ended July 1. Market analysts' expected a crude-stock decline of 2.25 million barrels, while the American Petroleum Institute late Wednesday reported a supply decrease of 6.7 million barrels.
Oil was registering gains of more than 1% in the lead up to Thursday's report.
The reports come out one day later than usual due to the Independence Day holiday in the U.S. on Monday.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, fell by 0.082 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 524.4 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 decreased by 0.122 million barrels, compared to expectations for a decrease of 0.353 million barrels, while distillate stockpiles fell by 1.574 million barrels, compared to forecasts for an increase of 0.031 million.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for September delivery also turned around, falling 57 cents, or 1.17%, to $48.23 by 15:07GMT, or 11:07AM ET, compared to $49.13 before the release.
Meanwhile, Brent's premium to the WTI crude contract stood at $1.33 a barrel at 15:10GMT, or 11:10AM ET, compared to a gap of $1.37 by close of trade on Wednesday.
Signs of a potential recovery in U.S. drilling activity remained in focus. According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. rose by 11 last week to 341, marking the fourth increase in five 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.