Brent crude futures gained 79 cents to settle at $78.86 per barrel. Earlier, the global benchmark hit a session high of $79.51. U.S. crude futures rose 26 cents to settle at $74.11, after hitting a high of $74.70.
NEW YORK: Oil prices rose on Wednesday, as U.S. government data that showed signs of tightening supply and investors remained concerned about supply disruptions following U.S. sanctions on Venezuela's oil industry.
U.S. crude futures rose 92 cents to settle at $54.23 a barrel, a 1.73 percent gain. Brent crude futures gained 33 cents, or 0.54 percent, to $61.65 a barrel.
Prices 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 production.
Crude inventories rose by 919,000 barrels, the Energy Information Administration said, compared with analysts' expectations in a Reuters poll for an increase of 3.2 million barrels.
After eight straight weeks of builds to a record high, gasoline stocks fell 2.2 million barrels last week, versus forecasts for a 1.9 million-barrel gain.
"The report looked supportive on several fronts with the most obvious being a smaller-than-expected crude build of less than 1 million barrels," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. "While the slight increase may not appear monumental, we will reiterate that the build compared with 5-year average increases of about 7.5 million barrels."
The market has been supported since Washington announced export sanctions against Venezuela on Monday, limiting transactions between U.S. companies and Venezuelan 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 that 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.
"The main risks for supply could come from a violent confrontation within the country, damaging the oil infrastructure," analyst Carsten Menke at Julius Baer said.
"Yet the risks of such an event seem very low," he added. "This oil will find its way to the market."
GRAPHIC: Venezuela vs U.S. crude oil production - https://tmsnrt.rs/2HH4Otd
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 launched 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. - Reuters
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