U.S oil prices rose more than 3 percent on Tuesday after a strike by workers in Kuwait nearly halved the OPEC member's crude production, overshadowing bearish sentiment after Sunday's failure by producers to agree to freeze output levels.
The June WTI contract settled at a new 2016, up 3.1 percent, at $42.47 a barrel.
Post-settlement, crude retreated after API data reported a gain of 3.1 million barrels. Analysts had expected a gain of 640,000 barrels, according to StreetAccount.
Thousands of Kuwaiti oil workers downed tools for a third day on Tuesday to protest against planned public sector pay reform, cutting crude output to 1.5 million barrels per day (bpd), according to an oil spokesman cited by news agency KUNA.
That is little more than half of Kuwait's average output of 2.8 million bpd in March.
Reports of power outages leading to output declines of about 200,000 bpd in Venezuela and a pipeline fire in Nigeria that may have cut production by 400,000 bpd, along with the upcoming refinery maintenance season boosted the rebalancing of market and was supporting prices, traders said.