Oil prices down despite supplies drop

Oil prices edged down Wednesday although a report showed that crude inventories of the United States declined last week.

For the week ended May 30, nationwide crude stockpiles in the United States decreased 3.4 million barrels to 389.5 million, beating market's expectation of a 250,000-barrel drop, according to the Energy Information Administration (EIA).

Stockpiles at Cushing, Oklahoma, the delivery point for WTI, fell 321,000 barrels to 21.4 million. Cushing stockpiles have slipped from 41.8 million barrels in late January as the southern leg of the Keystone XL pipeline started to transport crude to Gulf Coast refineries.

U.S crude production dropped 89,000 barrels to 8.383 million barrels per day.

U.S. economic data came in mixed Wednesday. U.S. private sector employment increased by 179,000 jobs in May, according to a report released Wednesday by private payroll processor ADP. The fresh data fell short of analysts' expectations of a gain of 210,000.

The Institute for Supply Management (ISM) said economic activity in the U.S. non-manufacturing sector grew in May for the 52nd consecutive month.

Light, sweet crude for July delivery moved down 2 cents to settle at 102.64 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery lost 42 cents to close at 108.4 dollars a barrel.