Oil prices extended gains to trade at intraday highs for
the year after data showed U.S. commercial crude oil inventories
increased less than expected.
Stockpiles of U.S. crude grew by 1.3 million barrels in the week ended April 10, the Energy Information Administration reported. Total inventories stood at 483.7 million barrels, the highest level on record.
In the prior week, the agency reported stocks surged by nearly 11 million barrels, the largest build since 2001.
The report also showed motor gasoline stockpiles fell by 2.1 million barrels.
Read MoreOil demand seen rising, but Iran calls for cut
U.S. crude futures rose $1.66 to $54.95, after hitting a new intraday high of $55.14 for the year.
Front-month Brent crude futures were up $1.37 at $59.80 per barrel by 10:47 a.m. EDT (1447 GMT).
Stockpiles of U.S. crude grew by 1.3 million barrels in the week ended April 10, the Energy Information Administration reported. Total inventories stood at 483.7 million barrels, the highest level on record.
In the prior week, the agency reported stocks surged by nearly 11 million barrels, the largest build since 2001.
The report also showed motor gasoline stockpiles fell by 2.1 million barrels.
Read MoreOil demand seen rising, but Iran calls for cut
U.S. crude futures rose $1.66 to $54.95, after hitting a new intraday high of $55.14 for the year.
Front-month Brent crude futures were up $1.37 at $59.80 per barrel by 10:47 a.m. EDT (1447 GMT).
Crude oil prices rose on Wednesday amid tension in the
Middle East and signs of a dip in U.S production, but gains were initially capped by a report from the International Energy Agency indicating that supplies would take longer to tighten than previously expected.
Prices were supported by uncertainty in the Middle East, where fighting continues in Yemen. A Saudi-led campaign of air strikes against Iran-allied Houthi rebels threatened to turn into a ground intervention after Egypt said it had discussed military maneuvers with Saudi Arabia and other Gulf allies.
In the United States, North Dakota's February oil production fell 15,000 barrels per day versus January, although the number of producing wells hit a record high.
That followed an Energy Information Administration report forecasting U.S. shale production would fall by 45,000 bpd to 4.98 million bpd in May, which would be the first monthly decline in four years.
But world oil markets may take longer to tighten than expected due to supply rising faster than demand, the IEA said on Wednesday. Production from the Organization of the Petroleum Exporting Countries surged to 31.02 million barrels per day in March, almost a two-year high, outweighing a rise in demand.
Read MoreAll of the sudden, the energy sector is crushing the market
"Recent developments thus may call into question past expectations that supply and demand responses would tighten the market from mid-year on," the IEA said in its monthly report.
Meanwhile, China saw its economic growth slow to 1.3 percent between January and March on a quarterly basis after seasonal adjustments, compared with growth of 1.5 percent in the previous three
March factory output rose 5.6 percent from a year earlier, below the 6.9 percent seen in a Reuters poll and its lowest level since the global financial crisis in 2008.
Analysts said that investors were losing interest in commodities.
"Given the poor return performance of commodities so far this year, it looks likely that the first two months of the year are likely to prove a peak in inflows for the year," Barclays said in a note on Wednesday, adding that it expected net outflows to resume soon, especially in the oil sector.
Middle East and signs of a dip in U.S production, but gains were initially capped by a report from the International Energy Agency indicating that supplies would take longer to tighten than previously expected.
Prices were supported by uncertainty in the Middle East, where fighting continues in Yemen. A Saudi-led campaign of air strikes against Iran-allied Houthi rebels threatened to turn into a ground intervention after Egypt said it had discussed military maneuvers with Saudi Arabia and other Gulf allies.
In the United States, North Dakota's February oil production fell 15,000 barrels per day versus January, although the number of producing wells hit a record high.
That followed an Energy Information Administration report forecasting U.S. shale production would fall by 45,000 bpd to 4.98 million bpd in May, which would be the first monthly decline in four years.
But world oil markets may take longer to tighten than expected due to supply rising faster than demand, the IEA said on Wednesday. Production from the Organization of the Petroleum Exporting Countries surged to 31.02 million barrels per day in March, almost a two-year high, outweighing a rise in demand.
Read MoreAll of the sudden, the energy sector is crushing the market
"Recent developments thus may call into question past expectations that supply and demand responses would tighten the market from mid-year on," the IEA said in its monthly report.
Meanwhile, China saw its economic growth slow to 1.3 percent between January and March on a quarterly basis after seasonal adjustments, compared with growth of 1.5 percent in the previous three
March factory output rose 5.6 percent from a year earlier, below the 6.9 percent seen in a Reuters poll and its lowest level since the global financial crisis in 2008.
Analysts said that investors were losing interest in commodities.
"Given the poor return performance of commodities so far this year, it looks likely that the first two months of the year are likely to prove a peak in inflows for the year," Barclays said in a note on Wednesday, adding that it expected net outflows to resume soon, especially in the oil sector.
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