Investing.com - West Texas Intermediate oil futures declined on Wednesday, despite speculation weekly supply data due later in the session will show U.S. crude inventories fell at a faster pace than expected last week.
On the New York Mercantile Exchange, crude oil for August delivery shed 46 cents, or 0.89%, to trade at $51.87 a barrel during European morning hours.
On Tuesday, New York-traded oil prices tumbled to $50.58, the weakest level since April 6, before ending at $52.33, down 20 cents, as concerns over Greece's debt crisis and steep losses on Chinese stock markets weighed.
Wednesday's government report was expected to show that U.S. crude oil stockpiles fell by 0.7 million barrels last week, while gasoline stockpiles were forecast to decline by 0.3 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories fell by 958,000 barrels in the week ended July 3, compared to expectations for a drop of 1.1 million.
U.S. oil futures plunged last week after Baker Hughes (NYSE:BHI) reported that the number of domestic rigs drilling for oil rose by 12 to 640 last week, snapping 29 straight weeks of declines.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for August delivery dipped 69 cents, or 1.21%, to trade at $56.16 a barrel. A day earlier, London-traded Brent hit $55.10, a level not seen since March 25, before turning higher to close at $56.85, up 31 cents, or 0.55%.
The spread between the Brent and the WTI crude contracts stood at $4.29 a barrel, compared to $4.52 by close of trade on Tuesday.
Investors continued to monitor developments surrounding the ongoing Greek debt crisis. At an emergency euro zone summit in Brussels on Tuesday evening, European leaders handed Greece a five-day deadline to submit a detailed package of reforms to international creditors in return for a bailout.
Failure to reach an agreement would increase the likelihood of Greece leaving the single currency union.
The Greek government was to present a formal application later Wednesday for a new rescue package from the European Stability Mechanism, the euro zone’s permanent bailout fund.
Meanwhile, shares in China plunged further on Wednesday despite fresh efforts by the government to calm the market.
The Shanghai Composite tumbled nearly 6% in volatile trade after having fallen as much as 8% shortly after the open with trading in more than 500 companies listed in Shenzhen and Shanghai suspended. The index is down almost 37% over the past four weeks.
Market players are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation's demand for oil will decline.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Oil traders were also eyeing nuclear talks between the West and Iran, which could push millions of barrels of crude into the oversupplied world market.
Tehran wants to double oil exports to more than two million barrels a day if a deal is reached and sanctions are lifted, a top Iranian official said Monday.
Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.