The US benchmark, West Texas Intermediate (WTI) for delivery in July, fell 15 cents to $103.92 a barrel.
Brent North Sea crude for July lost 17 cents to stand at $110.38 a barrel just after midday in London.
Crude futures had rallied on Wednesday following news of tumbling crude reserves in top consumer the United States.
New York crude had jumped to a one-month peak at $104.07, while Brent struck a two-and-a-half-month high at $110.55.
The US Department of Energy said stockpiles plunged 7.2 million barrels in the week ending May 16, confounding traders who expected a gain of 700,000.
Thursday's price losses were meanwhile capped by signs of a recovery in China's manufacturing sector.
Banking giant HSBC said preliminary data from its purchasing managers index (PMI) showed activity in China's factories shrinking at a much slower pace in May than April.
The banking giant's PMI improved to 49.7 from 48.1 last month.
While the figure is below the 50-mark that suggests contraction, it is the second straight month of improvement and will fuel hopes the world's number two economy is picking up after months of slowing.