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U.S. West Texas Intermediate crude futures rose $1.31, or 2.5 percent, to $54.62 per barrel around 2 p.m. ET. International Brent crude oil futures were up 87 cents, or 1.4 percent, at $62.19 per barrel.
Futures ticked higher as U.S. equities rose and the dollar fell after the U.S. Federal Reserve pledged a “patient” approach to future interest rate increases. Oil futures and stocks often move in tandem, while a weaker greenback makes crude more affordable because it’s sold in dollars.
Prices earlier extended gains after government data showed U.S. crude oil stockpiles rose less than expected last week due to a drop in imports, while gasoline inventories fell from record highs as refiners slowed down production.
Crude inventories rose 919,000 barrels, the Energy Information Administration said, compared with analysts’ expectations in a Reuters poll for an increase of 3.2 million barrels.
“Because we had a huge drop in gasoline inventories, that gave a bullish tint to the entire report,” said Phil Flynn, an analyst at Price Futures Group in Chicago.
The market has been supported since Washington announced export sanctions against Venezuela on Monday, limiting transactions between U.S. companies and the state-owned oil firm PDVSA.
The fight to control Venezuela, which has the world’s largest oil reserves, has intensified with the new sanctions aimed at driving President Nicolas Maduro from power, the strongest U.S. measures yet against the socialist president who has overseen economic collapse and an exodus of millions of Venezuelans in recent years.
The sanctions aim to freeze sale proceeds from PDVSA’s exports of roughly 500,000 barrels per day of crude to the United States, the OPEC member’s largest crude importer.
Traders who sell Venezuelan crude to the United States are looking for avenues to keep crude flowing during the sanctions, according to people familiar with the discussions, while U.S. companies who buy Venezuelan oil have also been looking for work-arounds, seeking counsel for instance on whether the use of third party intermediaries, such as commodity merchants, can continue.
“Yet the risks of such an event seem very low,” he added. “This oil will find its way to the market.”
Market participants remained worried about global economic growth, which has shown signs of slowing amid a trade dispute between the United States and China, the world’s two biggest economies.
Officials from Washington and Beijing are set to launch a new round of trade talks on Wednesday. The two sides have slapped hefty import tariffs on each other’s goods.
China reported its lowest annual economic growth in nearly 30 years last week, adding to a litany of worrying economic data from Europe and East Asia.
— CNBC’s Tom DiChristopher contributed to this report.