Oil prices rose on Wednesday after U.S. data showing a hefty drawdown in gasoline stockpiles overshadowed crude inventories rising to their highest levels in more than a year.
Brent crude futures, the international benchmark for oil prices, were up $1.04, or 1.5%, at $71.65 per barrel around 2:30 p.m., after hitting a five-month high. U.S. West Texas Intermediate crude oil futures rose 64 cents, or 1%, to $64.62 per barrel, holding just below their strongest level since November.
U.S. crude stockpiles last week rose to their highest since November 2017 last week as imports increased, while gasoline inventories posted the steepest drawdown since September 2017, the Energy Information Administration said.
Crude inventories swelled by 7 million barrels last week, compared with analysts' expectations for an increase of 2.3 million barrels. Gasoline stocks, however, fell 7.7 million barrels, compared with analysts' expectations in a Reuters poll for a 2 million-barrel drop.
"The report is supportive due to the large gasoline inventory drawn," said John Kilduff, a partner at Again Capital LLC in New York. "Even though the crude oil inventory rise was nearly equal in size, the focus of the complex, as we head into peak summer driving season, is gasoline."
Prices were also boosted by U.S. sanctions on oil exporters Iran and Venezuela, as well as supply cuts by the OPEC and allies including Russia, a group known as OPEC+.
Supplies from OPEC dropped by half a million barrels a day in March to a four-year low as Saudi Arabia continued to curb production. The monthly output cut totals about half a percent of global crude demand.
"The global oil market is clearly moving back towards balance thanks to OPEC+ production cuts," ING bank said.
The Dutch bank said the reduction was not only down to voluntary supply cuts, which the group started this year to prop up prices, but also involuntary curbs from Venezuela and Iran - which are exempt from the OPEC cut pact - due to U.S. sanctions.
"Declines from these two exempt countries account for almost 47% of the reduction seen from OPEC," ING added.
Protests led to the resignation of Algeria's president this month and armed clashes have erupted near the Libyan capital Tripoli, but political upheaval has yet to impact output in major North African producers.
The OPEC monthly report released on Wednesday showed that Venezuela's oil output sank last month to a long-term low below 1 million barrels per day, due to U.S. sanctions and blackouts.
"With geopolitical risks continuing to impact production from Venezuela and Iran and now also potentially Libya and even Algeria, the crude oil market is likely to remain supported until the price reaches a level that is satisfactory for OPEC and Russia," said Ole Hansen, commodity strategist at Saxo Bank.
Russia's role in global supply has also came into focus after a senior Russian official signaled that Moscow might seek to raise output, though President Vladimir Putin indicated on Tuesday that current prices suited Russia.
"The Russian camp is increasingly coy about extending supply cuts. Suffice to say this may throw a spanner in the works for a sustained price recovery," said PVM analyst Stephen Brennock.
— CNBC's Tom DiChristopher contributed reporting.