Oil prices eased early on Wednesday as US inventory data and signs of recovering Libyan output fed bearish sentiment.
Brent crude oil futures were down 0.2%, trading at around $51.7 a barrel.
Estimates showing US gasoline stockpiles rose last week fuelled concerns over lacklustre demand. Meanwhile, on the supply side, Libyan production was set to increase as a key oil field came back on stream.
Data from the American Petroleum Institute (API) released yesterday showing an increase in gasoline inventories surprised the market, especially as demand traditionally peaks during the US driving season.
API data indicated that US gasoline stockpiles rose by 1.4 million barrels in the week ended 18 August. Investors, meanwhile, were unimpressed by API figures showing that US crude inventories rose by 3.6 million barrels during the same week.
Investors positioned themselves for official gasoline inventory data due later today from the US Energy Information Administration to similarly surprise on the upside.
Yesterday´s API estimate of a 1.4 million-barrel rise in gasoline stocks over the week compares with market expectations for a 643,000-barrel drawdown.
At the same time, concerns over supply continue, especially with regard to OPEC production and the organisation´s ability to rein in output.
Libya's Sharara oil field was widely reported to be ramping up production following recent problems.
The closure of Sharara due to a blockade earlier this month impacted near-term Libyan supply, with the field accounting for around a third of Libya´s current potential production.
However, concerns over higher Libyan output have been among the factors weighing on the market this year. Earlier this summer, Libyan production spike to over 1 million barrels per day, around four times the output reached at the same point last year.