Oil down 3 pct after smaller-than-expected U.S. drawdown

By Barani Krishnan

NEW YORK (Reuters) - Oil prices fell nearly 3 percent on Wednesday, extending losses and hitting session lows, after the U.S. government reported a smaller-than-expected crude inventory draw for last week.

Crude futures had fallen earlier after the International Energy Agency (IEA) cautioned that a global supply glut was threatening market recovery.

Brent crude was down $1.33, or 2.9 percent, at $47.12 a barrel by 10:37 a.m. EDT (1437 GMT).

U.S. crude fell $1.20, or 2.7 percent, to $45.60.

The U.S. government's Energy Information Administration said crude inventories fell 2.5 million barrels last week, less than expectations for a 3 million-barrel drop in a Reuters poll and contradicting trade group American Petroleum Institute's report late Tuesday showing a crude build of 2.2 million barrels. [EIA/S] [API/S]

(Additional reporting by Karolin Schaps in LONDON; Editing by Nick Zieminski and Marguerita Choy)