Higher American output is threatening to offset cuts by the Organization of Petroleum Exporting Countries and its allies.
Oil prices rose about 1 percent on Wednesday, boosted by signs of strong U.S. demand for distillate products and tightening global crude supply, but gains were capped by a rising USA dollar and ongoing concerns about a global economic slowdown, Trend reports citing Reuters.
Gasoline stocks, however, continue to climb higher on the East Coast amid strong imports, resulting in a build on the aggregate despite a drop on the Gulf Coast, while distillate stocks have also eased amid lower refinery activity and higher implied demand, he said.
Oil prices have been on the rise since the US Treasury announced the seizure of $7 billion in assets of Venezuela's state oil firm PDVSA and its US subsidiary Citgo last week.
Prices also dipped after data showed US crude inventories at Cushing, Oklahoma, the delivery point for USA crude futures, rose by more than 943,000 barrels in the week to February 1, traders said, citing data from market intelligence firm Genscape.
Futures on United States and global benchmarks, West Texas Intermediate (WTI) and Brent crude, rose to the highest level since late November 2018.
International Brent crude oil futures had yet to trade.
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Oil prices edge higher amid concerns over global economy
The global economic outlook and prospects for growth in fuel demand have been clouded by poor economic data in China and U.S. The recent downswings in the crude oil market have been highly correlated with the release of the bearish economic data.
Lower OPEC output and hopes of some progress over the US-China trade dispute have helped Brent prices recover to around US$60 per bbl, although the outlook on oil demand remains subdued. WTI settled 2.73 percent higher in the last session at its highest close since November 19.
A flotilla loaded with Venezuelan oil has formed in the Gulf of Mexico, some holding cargoes bought ahead of the latest USA sanctions on Venezuela and others whose buyers are weighing who to pay.
Russia has been in full compliance with its pledge to gradually cut its oil production, Russian Energy Minister Alexander Novak said in a statement on Monday, adding that production decreased by 47,000 barrels per day (bpd) in January from October. OPEC supply fell last month by the largest amount in two years, a Reuters survey last week found.
The producers known as OPEC+ began cutting production from last month to avert a new supply glut and OPEC has delivered nearly three-quarters of its pledged cutback already, according to a Reuters survey.
Market participants are also watching for developments surrounding the U.S.
Traders are still anxious about the global economic slowdown especially because of the uncertainty surrounding the U.S. "China trade talks", said Gene McGillian, director of market research at Tradition Energy in Stamford, Connecticut.
With a nervous market, traders are focused on the U.S. State of the Union address by President Donald Trump.