Still, oil futures pared losses briefly after the data, which also showed growing US demand.
The analysts expect oil prices to remain range-bound throughout 2018 and in 2019, as lower Iranian supply and lower stocks will continue to be bullish factors, while trade tensions that could hurt oil demand and market sentiment, coupled with rising USA oil production would keep a lid on prices.
Signs that a supply disruption in the Bab al-Mandeb Strait in the Red Sea could be resolved also weighed on prices.
Oil prices are likely to hold fairly steady this year and next as increased output from OPEC and the USA meets growing demand led by Asia and helps to offset supply disruptions from Iran and elsewhere, a Reuters poll showed on Tuesday.
Kuwait and the United Arab Emirates raised output by 80,000 bpd and 40,000 bpd respectively in July; Nigeria increased production by 50,000 bpd, and Iraq increased supply as well; as for the Saudis, the bulk of their boost "appears to have been delivered in June as Riyadh tapped storage tanks to push supply to 10.60 million bpd, near a record high", stated Reuters, adding that "the increase infuriated Iran and surprised other OPEC members with its scale".
Futures in NY were little changed after climbing 2.1% Monday, the biggest gain in more than a month.
The initial deal, under which OPEC and non-OPEC producers are cutting supply by about 1.8 million barrels per day, had expired in March 2018.
September Brent crude futures fell 25 cents, or 0.3%, to $US74.29 a barrel in Europe, while September West Texas Intermediate crude futures dropped 92 cents, or 1.3%, to $US68.69 a barrel in NY.
Oil prices were mixed on Monday with USA benchmark WTI nudging higher after four weeks of declines, while Brent began the week lower as the fallout from trade tensions weighed on markets. USA efforts to cut Iran's oil exports are expected to contribute to global oil price volatility in the short term, according to the International Energy Agency.
At 408.7 million barrels, the EIA said, crude oil inventories were below the five-year seasonal average. September WTI fell 92 cents, or 1.32%, to settle at $$68.69 a barrel, for a weekly gain of 0.6%.
The Organization of the Petroleum Exporting Countries, plus Russian Federation and other allies, decided in June to ease supply cuts that had been in place since 2017 after a glut was cleared.
OPEC hiked production 70,000 barrels per day to 32.64 million bpd, a 2018 high. This will also mean higher prices.
Russian oil production last month was on average above the level Moscow promised following the Organization of the Petroleum Exporting Countries and non-OPEC meeting in June, energy minister Alexander Novak indicated on Wednesday. Last week, Saudi Arabia suspended oil shipments through the strait after the Houthi group attacked Saudi oil tankers.
At the same time, representatives of U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are having private conversations as they look for ways to re-engage in negotiations in a bid to avert a full-fledged trade war, two people familiar with the effort said. Trade tensions between the U.S. and its economic partners are also weighing down on prices due to the potential impact on economic growth and energy demand.