Oil prices turned positive on Wednesday after government data showed U.S. fuel stockpiles dropped, offsetting a rise in the nation's crude inventories.
U.S. sanctions on Iran -- set to go into full effect next week -- and a bounce in stock markets from recent losses also underpinned crude futures.
Still, crude futures are more than $10 below four-year highs reached on Oct. 3 and on track for their worst monthly performance since July 2016.
U.S. light crude was 22 cents higher at $66.40 U.S. a barrel mid-morning Wednesday, having hit a two-month low of $65.33 a barrel on Tuesday.
Benchmark Brent crude oil was still down 10 cents at $75.81 U.S., reversing some of its earlier losses.. The contract fell 1.8% on Tuesday, at one point touching its lowest since Aug. 24 at $75.09.
Information released Wednesday by the U.S. Energy Information Administration (EIA) said U.S. commercial crude stockpiles rose by 3.2 million barrels, compared with expectations for an increase of 4.1 million barrels. The rise was driven by an increase at the Cushing, Oklahoma delivery hub, where inventories jumped by 1.9 million barrels.
At the same time, gasoline held in storage fell by 3.2 million barrels and distillate fuel inventories — including diesel and heating fuel — dropped by 4.1 million barrels.
New U.S. sanctions on Iran begin on Nov. 4 and Washington has made it clear to Tehran's customers that it expects them to stop buying any Iranian crude oil from that date.
