Oil prices slipped in early trade on Thursday after California reimposed some coronavirus lockdown measures, stoking worries a resurgence in COVID-19 cases will stall a recovery in fuel demand. US West Texas Intermediate (WTI) crude futures fell 13 cents, or 0.3%, to $39.69 a barrel at 0024 GMT, trimming a 1.4% rise from Wednesday. Brent crude futures fell 15 cents, or 0.3%, to $41.89 a barrel, after rising 1.8% in the previous session.

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California sharply rolled back efforts to reopen its economy on Wednesday, banning indoor restaurant dining in much of the state, closing bars and beefing up enforcement of social distancing and other measures as COVID-19 infections surged.

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Oil prices rose in the previous session after U.S. Energy Information Administration data showed U.S. crude inventories fell 7.2 million barrels from a record high last week, far more than analysts had expected, as refiners ramped up production and imports eased.

However, analysts noted the data also showed gasoline stockpiles rose due to a sharp increase in imports, against expectations for inventories to fall.

"Counter-seasonal builds in gasoline inventories as stockpiles unexpectedly rose are not precisely a bullish delight," AxiCorp strategist Stephen Innes said in a note.
"The EIA data showed that gasoline imports hit the highest level since last August and peaked the most on a seasonal basis in nine years."

All eyes will be on driving activity in the United States over the upcoming July 4th holiday weekend and how quickly U.S. producers revive shut-in production, analysts said.