Crude futures remained under pressure as U.S.-Chinese trade dispute threatened global oil demand, but Middle East tensions capped losses.
Brent crude futures rose 58 cents, or nearly 1%, to $71.82 a barrel around 1:05 p.m. ET (1705 GMT). U.S. West Texas Intermediate crude futures were up 22 cents at $62 per barrel.
U.S. crude stockpiles rose by 5.4 million barrels in the week to May 10, the U.S. Energy Information Administration reported on Wednesday. This compared with analyst expectations for a decrease of 800,000 barrels.
However, figures from industry group the American Petroleum Institute released on Tuesday had suggested that U.S. inventories increased by 8.6 million barrels.
The EIA report also showed gasoline stockpiles fell by 1.1 million barrels, while inventories of distillate fuels, which include diesel and home heating fuel, increased slightly.
Elsewhere, growth in China’s industrial output slowed more than expected to 5.4% in April from a 4½ year high in March, reinforcing views that Beijing will have to roll out more stimulus measures as a trade war with the United States intensifies.
U.S. President Donald Trump on Tuesday called the trade war with China “a little squabble” and insisted talks between the world’s two largest economies had not collapsed.
Oil prices have drawn support after Saudi Arabia said on Tuesday that armed drones struck two of its oil pumping stations, two days after the sabotage of oil tankers near the United Arab Emirates.
“Given that nearly one-third of global oil production and nearly all of global spare capacity are in the Middle East, the oil market is very sensitive to any attacks on oil infrastructure in this region,” Swiss bank UBS said, adding it expected Brent prices to rise toward $75 in coming weeks.
The attacks took place against a backdrop of U.S.-Iranian tension following Washington’s decision this month to try to cut Iran’s oil exports to zero and to beef up its military presence in the Gulf in response to what it said were Iranian threats.
Meanwhile, OPEC said that world demand for its oil would be higher than expected this year as supply growth from rivals including U.S. shale producers slows. That points to a tighter market if the exporter group refrains from raising output.
The International Energy Agency said the world would require very little extra oil from OPEC this year as booming U.S. output will offset falling exports from Iran and Venezuela.
For the week, U.S. crude oil production ticked down to 12.1 million bpd, the EIA data showed. American output has remained stuck in a range between 12 million and 12.3 million bpd for much of the year, largely due to infrastructure bottlenecks in Texas.
The agency also revised its forecast for growth in 2019 global oil demand 90,000 bpd lower to 1.3 million bpd. It said 2018 demand growth had been estimated at 1.2 million bpd.
— CNBC’s Tom DiChristopher contributed to this report.