Amid rising optimism about where oil prices are going, the EIA reported a 1-million-barrel draw in crude oil inventories for the week to April 14, just a day after the American Petroleum Institute estimated commercial oil inventories had fallen by a modest 840,000 bpd but gasoline inventories had gone up surprisingly by 1.37 million barrels.
Iran will probably be allowed to keep its oil production unchanged if OPEC decides to extend its six-month agreement on output cuts beyond June, Kuwaiti Oil Minister Issam Almarzooq said, adding that the Persian Gulf OPEC member has shown strong compliance with the OPEC supply cut deal.
U.S. West Texas Intermediate (WTI) crude futures had risen 31 cents, or 0.61 percent, to $50.75 a barrel.
Oil prices headed lower Wednesday as USA data revealed the first weekly climb in gasoline supplies in two months, offsetting support from a second straight weekly decline in crude stockpiles. Crude inventories fell 1.03 million bbl to 532.3 million last week, the agency reported Wednesday.
"Rising oil output in the US remains the predominant bearish factor for prices despite growing anticipation that OPEC will extend a self-imposed cap on its oil production in the upcoming May meeting", Abhishek Kumar, senior energy analyst at Interfax Energy Global Gas Analytics said recently.
Oil had rallied above $53/bbl after some members of the Organization of Petroleum Exporting Countries voiced support for prolonging cuts past June, but rising US output is undermining the effort to trim a global glut.
Brent crude futures dipped 18 cents at $54.71 a barrel as of 15:16 GMT, while USA crude futures lost 19 cents to $52.22 a barrel. "Production is up nine straight weeks here to the highest level since August 2015".
US crude production rose to 9.252 million barrels per day from 9.235 million barrels in the week prior, continuing a strong rebound, according to EIA.
Refineries processed 16.9 million barrels a day, up 241,000 barrels from the prior week and the highest since the record 17.1 million was touched in January. At the same time, gasoline inventories were down by 3 million barrels.
Traders opined that oil prices gained support as OPEC's secretary general assured that the oil cartel is committed to rebalance market stability by bringing down crude stocks down across the globe to the industry's five-year average.