Investing.com - Oil prices fell on Thursday, wiping out an earlier rally stemming from a bullish U.S. inventory report, as concerns reemerged that global supply far outstrips demand.
In the New York Mercantile Exchange, West Texas Intermediate crude oil futures for delivery in February traded down 3.54% at $54.78 a barrel during U.S. trading, up from a session low of $54.58 a barrel and off a high of $59.01 a barrel.
The February contract settled up 0.94% at $56.79 a barrel on Wednesday.
Support for the commodity was seen at $53.94 a barrel, Tuesday's low, and resistance at $59.27 a barrel, Wednesday's high.
Oil prices rallied on Wednesday due to short covering and on U.S. supply data.
The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories fell by 0.847 million barrels in the week ending Dec, 12.
The draw fell short of expectations for a decline of 2.36 million barrels, though oil prices shot up as investors viewed an earlier American Petroleum Institute report revealing an unexpected 1.9 million barrel increase in U.S. oil stockpiles as an anomaly.
By Thursday, prices fell anew on concerns of a global supply glut, with investors searching for new support levels.
Despite an improving U.S. economy, headwinds continue to cool European and Asian economies and hamper demand for fuel and energy, while unrest in the Middle East and Ukraine has failed to disrupt supply as once feared.
Separately, on the ICE Futures Exchange in London, Brent oil futures for January delivery were down 2.80% at US$59.47 a barrel, while the spread between Brent and U.S. crude contracts stood at $4.69.