Investing.com - Oil prices added to overnight losses in European trade on Wednesday, sliding to a more than three-week low amid speculation weekly supply data due later in the session will show U.S. crude inventories rose for the first time in four weeks last week.
The U.S. Energy Information Administration will release its weekly report on oil supplies at 14:30GMT, or 10:30AM ET, amid expectations for a drop of 2.3 million barrels.
Gasoline stockpiles are expected to fall by 0.3 million barrels while stocks of distillates, which include heating oil and diesel, are also expected to drop by 0.3 million barrels, according to analysts.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. oil inventories rose by 1.518 million barrels in the week ended June 10, disappointing expectations for a decline of 1.4 million barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub for WTI increased by 664,000 barrels, the API said, while gasoline inventories jumped by 2.254 million barrels and distillate inventories rose by 3.725 million barrels.
Crude oil for July delivery on the New York Mercantile Exchange fell to a session low of $47.55 a barrel, a level not seen since May 23. It last traded at $48.04 by 07:51GMT, or 3:51AM ET, down 45 cents, or 0.93%.
A day earlier, New York-traded oil prices shed 39 cents, or 0.8%. U.S. crude futures are up nearly 85% since falling to 13-year lows at $26.05 on February 11 as a decline in U.S. shale production boosted sentiment.
However, with prices now at levels that make drilling economical for some firms, the rig count might start rising soon and the decline in U.S. production may slow.
According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. increased by three last week to 328, the second straight weekly rise.
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.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for August delivery declined 47 cents, or 0.94%, to trade at $49.36 a barrel after falling to an intraday low of $48.91, the weakest level since June 2.
On Tuesday, London-traded Brent slumped 52 cents, or 1.03%, as global concerns over a Brexit weighed on appetite for riskier assets.
Recent polls suggested support for the U.K. campaign to leave the European Union is picking up.
A vote by Britain to leave the European Union may tip Europe back into recession, putting more pressure on the global economy and undermining future oil demand prospects.
Brent futures prices are still up by roughly 90% since briefly dropping below $30 a barrel in mid-February as unplanned supply disruptions in Africa eased concerns over a global glut
Meanwhile, Brent's premium to the WTI crude contract stood at $1.32 a barrel, compared to a gap of $1.34 by close of trade on Tuesday.