Investing.com - West Texas Intermediate oil prices fell in European trade on Wednesday, after rising sharply overnight, amid speculation weekly supply data due later in the session will show U.S. crude inventories rose at a faster pace than expected 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 gain of 0.7 million barrels.
Gasoline stockpiles are expected to fall by 0.7 million barrels while stocks of distillates, which include heating oil and diesel, are expected to drop by 1.0 million barrels, according to analysts.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. oil inventories rose by 3.5 million barrels in the week ended May 6, disappointing traders who were expecting an increase of 0.3 million barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub for WTI rose by 1.5 million barrels, the API said, while gasoline inventories increased by 0.3 million barrels and distillate inventories declined by 1.4 million barrels.
Crude oil for June delivery on the New York Mercantile Exchange shed 63 cents, or 1.41%, to trade at $44.03 a barrel by 07:58GMT, or 3:58AM ET.
A day earlier, Nymex prices jumped $1.22, or 2.81%, as fires in Canada's oil sand field region forced a week-long shutdown, knocking out around 1.5 million barrels of daily crude production.
However, oil sands companies around the Canadian energy hub of Fort McMurray began to restart operations on Tuesday, with firms expecting to gradually ramp up production in the coming days.
Nymex oil prices are up nearly 55% since falling to 13-year lows at $26.05 on February 11, as a decline in U.S. shale production boosted sentiment. However, analysts warned that market conditions remained weak due to an ongoing glut.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery dipped 60 cents, or 1.32%, to trade at $44.92 a barrel after rallying $1.89, or 4.33%, on Tuesday amid production declines and disruptions in Libya and Nigeria.
An ongoing fight by Middle East producers for market share in Asia weighed on prices. Iran has set its June official selling prices for heavier crude grades it sells to Asia at the biggest discounts to Saudi and Iraqi oil since 2007-2008, the latest sign that producers are willing to accept low prices in return for market share.
Brent futures prices are up by roughly 60% since briefly dropping below $30 a barrel in mid-February, despite the collapse of talks at a Doha summit in April aimed at achieving a production freeze among OPEC and Non-OPEC producers. OPEC meets on June 2 in Vienna and may discuss the freeze initiative again.
Meanwhile, Brent's premium to the WTI crude contract stood at 91 cents a barrel, compared to a gap of 86 cents by close of trade on Tuesday.