LONDON: Oil advanced after mixed data from the US government, which showed an unexpectedly large jump in crude inventories and a substantial drop in fuel stockpiles.
Futures added 0.7% in New York, trading above US$56 a barrel.
US government data showed crude stockpiles last week gained the most since mid-January, more than analysts had expected.
Still, a larger draw in refined-product inventories helped ease some concerns about demand.
Oil has surged more than 20% this year as the Organisation of Petroleum Exporting Countries and its allies restrain output in a bid to balance the market, while sanctions against Venezuela and Iran also keep supplies tight.
Despite those bullish factors, the rally has lost steam since mid-February as American crude output hit record highs and investors fret over a trade spat between the US and China.
“The market has received a ton of price-supporting news during the past couple of weeks, but without managing to break higher,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank in Copenhagen. “US inventory developments are more or less in line with the seasonal behaviour.”
West Texas Intermediate for April delivery was 42 cents higher at US$56.64 a barrel on the New York Mercantile Exchange as of 9:58 a.m. in London.
Prices lost 34 cents to close at US$56.22 a barrel on Wednesday.
Brent for May settlement added 68 cents to US$66.67 a barrel on the London-based ICE Futures Europe exchange.
The contract gained 13 cents to settle at US$65.99 a barrel on Wednesday, rising for a third consecutive session.
The global benchmark crude was at a US$9.63 premium over WTI for the same month.
Also see: Oil Futures Investors and Crude Cargo Traders Diverge on Prices
The Energy Information Administration said on Wednesday that US nationwide crude inventories expanded by 7.07 million barrels last week, exceeding the 1.45-million-barrel increase expected in a Bloomberg survey of analysts.
Still, US stockpiles of gasoline, distillates and propane fell by a combined 8.7 million barrels, the EIA data showed.
Meanwhile, President Donald Trump is said to be pushing for US negotiators to move closer to a final agreement with China soon, ending an almost yearlong trade dispute before his re-election campaign begins.
As talks advance between the world’s two largest economies, the American president has expressed concern that the lack of an agreement could drag down equities, according to people familiar with the matter.
“I’m skeptical about oil’s short-term ability to hold onto current levels,” said Hansen. “The demand outlook may get downgraded, equities are failing to break resistance, and the trade talks are priced in and can only disappoint. Staying long in the belief that Venezuela will deteriorate further is not a healthy bet when global growth is being downgraded.”