Investing.com - Oil prices edged higher in European trading on Wednesday, bouncing back from the prior session's losses after industry data overnight showed a sizable decline in U.S. oil stockpiles.
The U.S. West Texas Intermediate crude June contract tacked on 40 cents, or around 0.9%, to $46.28 a barrel by 3:55AM ET (07:55GMT).
The U.S. benchmark lost 55 cents on Tuesday amid fears that an ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance global oil supply and demand.
Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London rose 36 cents to $49.09 a barrel. The global benchmark declined 61 cents a day earlier.
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories fell by 5.79 million barrels in the week ended May 5.
The API report also showed a gain of 3.17 million barrels in gasoline stocks, while distillate stocks shrank by 1.17 million barrels.
The U.S. Energy Information Administration will release its official weekly oil supplies report at 10:30AM ET (14:30GMT) Wednesday. There are often sharp divergences between the API estimates and the official figures from EIA.
Analysts expect crude oil inventories dropped by around 1.8 million barrels at the end of last week, while gasoline supplies decreased by 538,000 barrels and distillates fell by about 1.0 million barrels.
Crude has been under pressure in recent weeks, rattled by concern over increasing U.S. crude output that has shaken investors' faith in the ability of OPEC to rebalance the market.
OPEC and non-member oil producers are considering extending a global supply cut for nine months or more to give the market more time to rebalance, OPEC and industry sources said on Monday.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day between January and June, but so far the move has had little impact on inventory levels.
A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.
Elsewhere on Nymex, gasoline futures for June inched up 0.3 cents, or nearly 0.3%, to $1.489 a gallon, while June heating oil added 0.6 cents to $1.448 a gallon.
Natural gas futures for June delivery dipped 2.3 cents to $3.204 per million British thermal units.