US oil settles up 53 cents, at $60.93 a barrel

Oil hit new highs for 2015 on Wednesday, bolstered by the first U.S. crude stockpile drop since January, before paring gains as investors and traders moved to take profits on a multi-week rally.

The dollar's recent tumble also fed the run-up in oil and other commodities, as those raw materials became more affordable for holders of the euro and other currencies.

U.S. crude futures settled up 53 cents, or 0.88 percent, at $60.93 a barrel. It rallied more than $2 to the year's high of $62.58 a barrel earlier.

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Futures of U.K. North Sea Brent, the more globally-used benchmark, were up 20 cents at $67.70 a barrel, having reached a 2015 peak of $69.93 earlier.

U.S. crude prices have risen every week since March 13, while Brent has seen weekly gains since April 3.

Wednesday's rise came after the U.S. Energy Information Administration said crude stockpiles fell by 3.88 million barrels last week, the first drop in four months.

The draw was more than double that projected by industry group American Petroleum Institute. A Reuters poll of analysts had estimated U.S. crude stocks to rise last week for a record 17th week in a row.

The EIA data lent conviction to oil bulls' bets that the global oversupply in crude could finally be easing.

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But skeptics said more work was needed to balance supply-demand in the market, which they said was overpriced after Brent's 21 percent rally in April and U.S. crude's 25 percent gain. Crude prices had tumbled earlier, by more than 50 percent since June on worries of an oil glut.

"We have come up a long way in a short time," said John Kilduff, partner at New York energy hedge fund Again Capital, referring to the rally of recent weeks. "People will ultimately realize that prices above $60 a barrel are going to reopen lots of idled oil rigs, meaning more supply."

Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut, noted that while last week's U.S. crude draw was bullish, there had been builds before for 16 straight weeks that had left more than 485 million barrels in storage.

"I'm not a big buyer of the idea that the fundamental picture has changed as yet. And the market continues to go higher as much as I feel it's overextended, and it doesn't look like the run up is over yet."

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U.S. production is steady and has been for the past several weeks. Production peaked slightly above 9.4 million barrels per day but has been holding above 9.3 million bpd.

For the week ended May 1, U.S. daily oil production was 9.369 million bpd, slightly lower than 9.373 the week before. Oil production has been over 9 million barrels a day since November, but the growth is stalling.

Wednesday's production level was 1 million barrels more than last year's 8.34 million bpd.

—CNBC's Patti Domm contributed to this report.