Oil prices were volatile Wednesday morning following a bullish weekly data report from the U.S. Energy Information Administration. 

The EIA said U.S. commercial crude oil inventories, excluding those in the strategic petroleum reserve, decreased by 6.5 million barrels during the week ended Aug. 4. 

West Texas Intermediate crude futures rose up to the 10:30 a.m. Wednesday report but dipped into the red slightly after the data released. WTI traded at $49.38 per barrel around 11 a.m., while global benchmark Brent crude contracts for October delivery remained barely in the green at $52.44 a barrel.

The market likely sold off a bit following the EIA report due to the American Petroleum Institute's Tuesday report indicating a bigger draw in crude inventories and a smaller build on gasoline, according to Jeff Quigley, director of energy markets at consulting and analytics firm Stratas Advisors. 

Total motor gasoline inventories increased by 3.4 million barrels last week, and are in the upper half of the average range as U.S. crude oil refinery inputs are up week over week. The EIA said inputs averaged 17.6 million barrels per day last week, 166,000 barrels per day more than the previous week.

"[The EIA data] was certainly bullish on the crude draw side," Quigley wrote in an email to TheStreet. "High refinery margins are continuing to buoy refinery runs, which is evidenced by the stock build in gasoline despite strong U.S. demand."

U.S. crude oil imports, meanwhile, averaged about 7.8 million barrels per day last week, down by 491,000 from the previous week, the EIA noted. Over the past four weeks, crude oil imports averaged over 8 million barrels per day, 4.9% below the same four-week period last year.

EIA's bullish data comes as OPEC leader Saudi Arabia recently promised to take further action to cap overall crude exports at 6.6. million barrels per day during August to speed up the global supply rebalancing to help prop up oil prices. 

An analysis of June EIA data by research firm Morningstar Inc. found that that weekly average U.S. imports of Saudi crude during June 2017 amounted to 876,000 barrels per day, or just 72% of the average during the first five months of 2017 and 83% of June 2016 imports. 

"The fall in U.S. imports likely shows the impact of Saudi export cuts to the U.S. and Gulf Coast refiners lightening their crude slate in response to the potential for sanctions (as an attempt to reduce operational risk)," Quigley explained. "This played a complementary role in U.S. stock draws in addition to high crude runs."

Still, at 475.4 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year, according to the EIA. But the inventory data continues to show a steady decline in domestic crude stockpiles that have helped a lingering global commodity oversupply persist.

"This report continues to reinforce a bullish demand narrative, which we have been pushing since early in the second quarter when pessimism was at its peak," Quigley wrote. "U.S. onshore production increase was in line with expectations. As crude prices rise, this is where the market will be testing how sensitive shale producers are in bringing back output." 

Following last week's drilling rig reductions, Baker Hughes' (BHGE) - Get Report weekly rig report will likely continue to be a focal point for analysts looking to determine the shift in U.S. supply.  

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