Oil gained more than 3% on Wednesday after data showed a smaller than expected build in U.S. inventories. The move also came as tensions in the Middle East rose, with Yemen's Houthi rebels claimed they intercepted a Saudi warplane.
West Texas Intermediate crude futures rose to a session high of $57.37 before settling at $57.11 for a 3.4%, or $1.90, gain. Brent crude futures rose $1.56 to settle at $62.47.
Crude inventories in the United States increased by 1.4 million barrels for the week ending Nov. 15, the U.S. Energy Information Administration said Wednesday, which was less than the 1.6 million barrels analysts surveyed by S&P Global Platts had been expecting. It was also below the previous week's 2.22 million barrel build.
"The weekly inventory report was more supportive of prices than it appeared at first glance," Again Capital's John Kilduff said.
"The overall rise in crude oil inventories was distorted by 2 million barrels of oil that came out of the SPR," he added, referring to the Strategic Petroleum Reserve. "Inventories at the Cushing, Oklahoma, delivery hub actually fell, markedly, by over 2 million barrels. Exports of crude oil also rebounded back above 3 million barrels per day. Gasoline demand has remained strong all year, and will only rise more into the holiday shopping season."
Rising tensions in the Middle East could also be impacting oil prices since one-fifth of the world's oil flows through the Strait of Hormuz.
Yemen's Houthi rebels said Wednesday they intercepted a Saudi F-15 warplane, according to Reuters, which Kilduff said "spooked" the market. Earlier, Reuters had said the plane had been shot down. Protests in Iran and Iraq are also ongoing, and the latter "are reaching some oil export facilities," Kilduff said.
Separately, Russian President Vladimir Putin said Wednesday he would continue to cooperate with OPEC on reducing output, according to Reuters. Russia is a member of OPEC+.
At last December's meeting of OPEC and its allies, the group agreed to cut daily production by 1.2 million barrels. The cartel meets on Dec. 5 in Vienna, and could consider an even steeper cut.
Wednesday's gain is a sharp turnaround from Tuesday's trading session, which saw crude tumble more than 3% as supply concerns and limited progress on the U.S.-China trade deal weighed.
Correction: An earlier story said the Houthis had shot down the Saudi plane, citing Reuters. Reuters later corrected the report.