Oil prices sank 3 percent to a three-week low on Wednesday as an increase in Libyan output helped boost monthly OPEC crude production for the first time this year. Brent notched its fifth straight monthly decline in a row despite OPEC-led output cuts and forecasts that U.S. crude inventories would fall for an eighth straight week since hitting a record at the end of March. Post-settlement, prices pared some losses as data from the American Petroleum Institute (API) showed crude inventories fell by 8.7 million barrels in the week to May 26 to 513.2 million, compared with analysts' expectations for a decrease of 2.5 million barrels.

U.S. Energy Information Administration (EIA) report is due at 11:00 a.m. EDT (1500 GMT) on Thursday, delayed a day because of the Memorial Day holiday on Monday. Brent crude futures for July fell $1.53, or 3.0 percent, to settle at $50.31 a barrel on their last day as the front-month. It was Brent's lowest close since May 10. U.S. West Texas Intermediate crude fell $1.34, or 2.7 percent, to settle at $48.32 per barrel, its lowest close since May 12.

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