Oil prices hung onto earlier gains as government data showed U.S. crude stocks rose sharply last week. Refinery output continued to fall in the wake of Hurricane Harvey, causing gasoline stocks and distillate inventories to drop as well.
Data released by the Energy Information Agency (EIA) showed U.S. commercial crude inventories rose by 5.9 million barrels in the week through Sept. 8, nearly doubling analysts' estimates for a rise of 3.2 million barrels. Total U.S. stocks stood at 468.2 million barrels.
The EIA also said refinery crude runs fell by 394,000 barrels per day. Refinery utilization rates fell by two percentage points.
Meanwhile, gasoline stockpiles fell by 8.4 million barrels, compared with analysts' expectations for a 2.1-million-barrel drop.
Experts also say, however, U.S. stockpiles data may not give a full picture in coming weeks because of Hurricanes Harvey and Irma.
Brent crude was up 32 cents, or 0.6%, at $54.59 U.S. a barrel by mid-morning Wednesday, while U.S. West Texas Intermediate was up 54 cents, or 1.1% at $48.77 U.S. a barrel.
EIA also revised its 2017 and 2018 U.S. oil output forecast figures lower to reflect, in part, effects of Hurricane Harvey.
Crude futures rose earlier on Wednesday after the International Energy Agency said the global oil surplus was starting to shrink due to robust global demand and an output drop from the Organization of the Petroleum Exporting Countries and other producers.
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