Investing.com - Crude prices fell in Asia on Thursday with markets downbeat on the supply outlook as U.S. inventories of gasoline show demand lagging a surge in domestic production and oversupplied global markets.
On the New York Mercantile Exchange crude futures for June delivery fell 0.56% to $49.34 a barrel, while on London's Intercontinental Exchange, Brent last traded at $52.08 a barrel.
The next piece of the weekly supply picture comes on Friday with U.S. oil rig count data which has been in steady expansion for nearly four straight months.
Overnight, crude futures settled higher on Wednesday, as concerns over rising levels of U.S. crude oil inventories abated, after the Energy Information Administration (EIA) reported U.S. crude inventories fell more than expected.
Crude prices soared above $50 a barrel, but pared gains later during the session, as investors weighed the rise in production against the larger than expected drawdown in U.S. crude inventories.
For the week ending April 19, The EIA said that crude oil inventories fell by 3.641 million, which confounded expectations of a draw of only 1.661 million barrels.
Meanwhile, gasoline inventories grew by 3.369 million against expectations for a drop of 1.020 million barrels while distillate stockpiles rose by 2.651 million barrels, compared to expectations of a 1.037 million decline.
The surprise build in gasoline inventories came against expectations of a draw, as the month of April usually signals the start of the US summer driving season, which is traditionally associated with heavier refining activity.
Despite the drop in U.S. crude inventories, investors remained concerned that rising shale oil production could impair OPEC efforts to reduce the global glut in supply.
The oil cartel has yet to agree an extension to the supply-cut agreement, but Saudi energy chief Khalid el- Falih hinted at a possible a deal extension, after he said he was interested in talks between OPEC and non-OPEC producers to stabilise oil prices.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day (bpd). The deal to cut supply started in January this year for a period of six months until June.
OPEC will decide at talks on May 25 whether to extend production cuts beyond June.