Investing.com - West Texas Intermediate oil futures turned lower in North America trade on Wednesday, reversing overnight gains after data showed that oil supplies in the U.S. fell much less than expected last week.
Crude oil for July delivery on the New York Mercantile Exchange dipped 8 cents, or 0.16%, to trade at $49.77 a barrel by 14:35GMT, or 10:35AM ET. Prices were at around $50.20 prior to the release of the inventory data after climbing to a daily peak of $50.54, the most since June 10.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 0.9 million barrels in the week ended June 17. Market analysts' expected a crude-stock decline of 1.7 million barrels, while the American Petroleum Institute late Tuesday reported a supply drop of 5.2 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, fell by 1.28 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 530.6 million barrels as of last week.
The report also showed that gasoline inventories increased by 0.6 million barrels, compared to expectations for a drop of 0.4 million barrels, while distillate stockpiles rose by 0.2 million barrels.
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 nine last week to 337, the third 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 shed 4 cents, or 0.08%, to trade at $50.58 a barrel after hitting an intraday high of $51.24, a level not seen since June 10.
On Monday, London-traded Brent futures dipped 3 cents, or 0.06%, as investors counted down to the upcoming British vote to decide whether to remain in the European Union.
Politicians on both sides of the debate will be making their last arguments today ahead of polling stations opening Thursday at 6:00GMT, or 7:00AM London time. Polls will close at 21:00GMT, or 10:00PM in London. The result will likely be projected early Friday, before the official vote count is announced, based on preliminary vote counts and exit polling.
Meanwhile, Brent's premium to the WTI crude contract stood at 81 cents a barrel, compared to a gap of 77 cents by close of trade on Tuesday.