Investing.com - Oil prices edged lower in European trade on Thursday, after rallying more than 3% overnight after a larger-than-expected gasoline draw eased concerns about global supply glut.
Crude oil for September delivery on the New York Mercantile Exchange dipped 7 cents, or 0.14%, to trade at $40.78 a barrel by 07:52GMT, or 3:52AM ET.
A day earlier, New York-traded oil jumped $1.32, or 3.34%, after data showed that gasoline supplies in the U.S. fell sharply last week, offsetting a surprise build in crude stockpiles.
The U.S. Energy Information Administration said in its weekly report that gasoline inventories decreased by 3.3 million barrels in the week ended July 29, much more than the expected 0.2-million-barrel decline.
The report also showed that crude oil inventories rose by 1.4 million barrels last week. Market analysts' expected a crude-stock decline of 1.4 million barrels, while the American Petroleum Institute late Tuesday reported a supply drop of 1.3 million barrels.
Total U.S. crude oil inventories stood at 522.5 million barrels as of last week, which the EIA considered to be “historically high levels for this time of year”.
Despite Wednesday's gains U.S. oil prices remain near four-month lows of $39.19 hit earlier this week. WTI crude futures are nearly 20% lower from their 2016 highs above $50 a barrel scaled in early June, technically placing it in bear market territory, as signs of an ongoing recovery in U.S. drilling activity combined with elevated stocks of fuel products weighed.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for October delivery inched down 18 cents, or 0.42%, to $42.92 a barrel, after rallying $1.30, or 3.11% on Wednesday.
London-traded Brent futures are down almost 18% since peaking at $52.80 in early June, as prospects of increased exports from Middle Eastern and North African producers, such as Iraq, Nigeria and Libya, added to concerns that a glut of oil products will cut demand for crude by refiners.