Brent crude futures for May delivery fell 48 cents to $68.99 a barrel, a 0.7 percent loss, by 1:31 p.m. EDT (1731 GMT) having retreated from a session peak of $69.70, close to its highest level since early February.
US West Texas Intermediate crude futures were at $65.20 a barrel, early on Thursday, up 3 cents from their previous settlement.
Stimulated by yesterday's surprise crude stockpiles decline estimated by API, at 2.74 million barrels, WTI today traded at US$64.24 at the time of writing, with Brent crude at US$67.97 a barrel. Gasoline production averaged 9.9 million barrels in the week to March 16, with refineries operating at 91.7 percent of capacity and processing 16.8 million barrels of crude daily.
But the USA remains a major importer of crude oil, in large part because American oil refineries are not designed for the lighter-weight crude that comes out of shale fields.
USA crude oil stockpiles fell unexpectedly last week as imports dropped and refining rates jumped, while gasoline and distillate inventories also declined, the Energy Information Administration said on Wednesday. Only Russia produces more, at around 11 million bpd, although US output is expected to overtake Russia's later this year as well.
Although analysts said the stand-off between the United States and China could hit oil markets, for now most said demand looked healthy. WTI traded between $US62.08 and $US63.81.
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Experts are of the view that U.S. oil exports could grow to as much as four to five million barrels a day in the medium term, prompting questions on which markets will buy the additional oil.
America's gasoline inventories also tumbled for a third week to the lowest level since late January, while distillate stockpiles contracted for a sixth straight week to the least since December.
Still, whether the decline in American inventories can reassure OPEC is uncertain.
Russian Federation is committed to seeing the output-cuts accord through to completion, whether that means starting discussions about an exit strategy at a scheduled meeting in June or prolonging the curbs into 2019, Energy Minister Alexander Novak said in a Bloomberg television interview. One of the options is looking at the past seven years of inventories in OECD countries, instead of five years. The decline comes as OPEC saw record compliance with production-cut targets in February as the group continues efforts to drain a global glut. By that measure, in the US, stockpiles are still 28 MMbbl higher than the target.