Even though OPEC has stuck to its pledge to cut production, United States output has risen by more than 10 per cent since mid-2016 to 9.3 million barrels per day in 2017 and a forecast all-time annual high of nearly 10 million barrels in 2018, boosted by the shale sector and near the output of Russian Federation and Saudi Arabia.
State-owned Saudi Aramco will reportedly reduce oil supplies to Asian customers by about seven million barrels in June, as part of the Organization of the Petroleum Exporting Countries' agreement to reduce production.
OPEC is curbing its output by about 1.2 million barrels per day (bpd) from January 1 for six months, the first reduction in eight years, to clear excess supply. Aramco had previously been maintaining supplies to its important Asian customers.
Brent was 69 cents higher, or 1.4 percent, at $50.91 a barrel by 12:07 p.m. EDT (1607 GMT) after hitting a high of $51.16.
By 11:12 a.m., USA crude futures CLc1 were up $1.30, or 2.8 percent, at $47.18 a barrel, and Brent crude LCOc1 rose 2.5 percent, or $1.25, to $49.98 a barrel.
Prices have been under pressure from rising USA output and concerns that Opec and supportive nations such as Russian Federation could extend production cuts agreed past year.
Production rose, however, and gasoline demand over the last four weeks was 2.5 percent lower than at the same time period a year ago. "For 2017, total U.S. liquids production is forecast to increase by 0.82 mb/d with crude oil contributing 0.6 mb/d", OPEC said.
Stocks at the Cushing, Okla., delivery hub for US crude futures fell 438,000 bbl, EIA said.
Saudi Arabia's Energy Minister Khalid Al-Falih said he was "confident the agreement will be extended into the second half of the year and possibly beyond", in comments at a conference in Kuala Lumpur.
The Organisation of Petroleum Exporting Countries (OPEC) has called on U.S. shale oil drillers to cut output for the prosperity of global economy.
Gasoline and distillate stocks also fell, supporting a market that has sold off in recent weeks due to persistently high USA inventories.
Venetis did not outline what "brisk" demand should consist of, but presumably it's more than what the U.S. Energy Information Administration on Tuesday forecast: it raised its 2017 world oil demand growth forecast by 70,000 barrels per day (bpd) to 1.56 million bpd. Offshore oil platforms are seen at the Bouri Oil Field off the coast of Libya August 3, 2015.
Crude prices surged back above $47 to settle higher, as investors' jitters concerning rising levels of US oil output eased, after the EIA revealed a bullish inventories report.
While US oil inventories fell, the country's crude oil production continued to rise, jumping above 9.3 million bpd last week, in what is now a more than 10 per cent increase since its mid-2016 trough.
Stockpiles of gasoline, one of the products that crude is refined into unexpectedly fell by 150,000 barrels, against expectations for a build of 65,400 barrels.
"We see prices between $45-50 per barrel as fundamentally justified".