Crude prices rebounded from early weakness on Wednesday in Asia after a surprise draw reported in an industry estimate of U.S. crude oil inventories and reports that Saudi Arabia favors an extension of a coordinated pact to trim global oil production.
On the New York Mercantile Exchange, crude futures for May delivery rose 0.30% to $53.56 a barrel, while on London's Intercontinental Exchange, Brent gained 0.34% to $56.42 a barrel.
Crude inventories in the U.S. fell 1.3 million barrels at the end of last week, the American Petroleum Institute (API) said Tuesday, a surprise drop with analysts expecting a build in supplies.
On Wednesday, official data from the U.S. Energy Information Administration (EIA) will be released. Last week, figures by the two groups diverged with API showing a crude draw and EIA a build.
For the past week, API also reported gasoline stocks dropped 3.7 million barrels and distillates declined by 1.6 million barrels. Supplies at the storage hub of Cushing Oklahoma rose by 360,000 barrels, API said.
Analysts expected a 316,000 barrels build in crude supplies, a drop in gasoline stocks of 1.761 million barrels, and a decline in distillate supplies of 896,000 barrels.
Overnight, crude settled higher on Tuesday, after reports surfaced that Saudi Arabia supported the idea of extending OPEC-led cuts by an additional six months to the end of the year.
Saudi Arabia informed OPEC officials it favoured an extension of the six-month OPEC-led deal to cut supply, which began in January this year, for an additional six months, when the group meets in May, according to the Wall Street Journal.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day (bpd). Production cuts began in January for a period of six months until June.