Oil resumes sell-off amid worries over supply glut

Oil prices edged lower in European trading on Thursday, moving back toward a four-week trough after weekly supply data showed U.S. gasoline supplies unexpectedly increased, while crude output kept rising.

The U.S. West Texas Intermediate crude June contract shed 45 cents, or around 0.9%, to $49.16 a barrel by 4:10AM ET (08:10GMT). The U.S. benchmark gained 6 cents on Wednesday.

It hit its weakest level since March 29 at $48.87 earlier in the week.

Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London dipped 45 cents to $51.96 a barrel, not far from a four-week low of $51.30 touched on Monday.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 3.6 million barrels in the week ended April 21, a larger draw than expected.

The report also showed that gasoline inventories increased by 3.4 million barrels, disappointing expectations for a drop 1.0 million barrels, as refiners produced more fuel than the market could consume.

Meanwhile, U.S. crude oil production continued its relentless rise, and is now up 10% since mid-2016 at 9.27 million barrels per day, at comparable levels to the peak oil glut between late 2014 and early 2016.

The increase in U.S. shale output has overshadowed pledged output cuts by major producers. In November last year, OPEC and other 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.

A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.

Elsewhere on Nymex, gasoline futures for June inched down 1.5 cents, or about 1%, to $1.568 a gallon, while June heating oil slipped 1.2 cents to $1.528 a gallon.

Natural gas futures for June delivery fell 1.1 cents to $3.260 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day.