Oil prices down after lower-than-expected inventory draw

West Texas Intermediate front-month crude future prices fell 0.6 percent to $52.07 per barrel, as of 8:35 a.m. EST while Brent front-month crude futures fell 0.4 percent to $61.20 per barrel.

If the trend continues throughout the day, it would be the first declining session so far this year. Prices have climbed since the start of the year when WTI futures traded just above $45 per barrel.

The early Thursday decline was "primarily driven by the lack of direction showed in the United States and China trade talks," said independent analyst Lakshan de Silva.

"The buoyancy shown the previous day came on the back of falling U.S. crude inventories, optimism surrounding U.S.-China trade talks and firm commitments made by Saudi Arabia to cut oil production," he said.

However, "a cause for concern is that the EIA (Energy Information Administration) data was not all rosy, as the crude drawback of 1.7 million barrels came below market expectation of a 2.5 million barrel draw back," he added.

In addition, "U.S gulf coast gasoline inventory levels hit 89.4 million barrels, a new high, while distillate products rose at the highest level in a month rising by 8.9 million barrels," he added.

As for the Saudi Arabia cuts, Martin Essex, analyst at Daily FX, said in a report sent to UPI that the market was optimistic that it could help reduce supply.

He mentioned an announcement "Wednesday by Saudi Arabia that it will cut its exports in January by 10 percent compared with November."

"Saudi Energy Minister Khalid al-Falih said it will reduce its exports from eight million barrels per day to 7.2 million and that there will be a further cut of 100,000 barrels per day in February," Essex added.