Oil prices edged lower in European trading on Thursday, as the market weighed rising U.S. shale production against ongoing efforts by major producers to cut output to reduce a global glut.
The U.S. West Texas Intermediate crude June contract dipped 18 cents, or around 0.4%, to $48.89 a barrel by 3:55AM ET (07:55GMT).
The U.S. benchmark gained 41 cents on Wednesday after data showed U.S. crude stockpiles fell for the sixth week in a row.
Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London declined 21 cents to $52.00 a barrel, after rising 56 cents a day earlier.
The U.S. Energy Information Administration said crude oil inventories fell by 1.8 million barrels in the week ended May 12, the sixth weekly decline in a row. However, the drawdown came in below expectations for a drop of 2.3 million barrels.
The EIA also reported that gasoline stockpiles declined by 400,000 barrels, while distillate stockpiles were down 1.9 million barrels last week.
Oil rallied at the start of the week on news that Saudi Arabia and Russia agreed to extend oil output cuts for a further nine months until March 2018. However, the 12 remaining OPEC members and other producers participating in the cuts have to agree to the extension during a meeting on May 25.
In November last year, OPEC and other major global 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.
Crude sank to a five-month low earlier this month, rattled by concern over increasing U.S. crude output that has shaken investors’ faith in the ability of OPEC to rebalance the market.
The U.S. rig count rose for the 17th week in a row to the highest level since August 2015 last week, implying that further gains in domestic production are ahead.
Elsewhere on Nymex, gasoline futures for June slipped 0.5 cents, or 0.3%, to $1.594 a gallon, while June heating oil shed 0.4 cents to $1.529 a gallon.
Natural gas futures for June delivery tacked on 1.1 cents to $3.203 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day.
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