Brent crude oil rose above $59 a barrel on Wednesday after data showed Chinese factories were producing more than expected and Saudi Arabia's oil minister said oil demand was growing.
Gains were capped, however, by data from the U.S. Energy Information Administration showing U.S. crude stocks rose 8.4 million barrels last week to a record level, including a 2.4 million barrel rise at Cushing, Oklahoma, delivery point of the U.S. crude oil contract.
Continue Reading Below
U.S. gasoline stocks fell by 3.1 million barrels and distillate stocks - including diesel and heating oil - fell by 2.7 million barrels, the EIA said.
China's factory sector has expanded slightly this month, according to the flash HSBC/Markit Purchasing Managers' Index. The index reached a four-month high of 50.1 in February, just above the 50 level that separates growth in activity from contraction. A Reuters poll had forecast a reading of 49.5.
China is the world's biggest energy consumer and second largest user of oil behind the United States, and even small changes in Chinese demand can move oil prices.
The market also had a small lift from comments by Saudi oil minister Ali al-Naimi, who spoke to reporters in the port city of Jizan, southwest Saudi Arabia.
"Markets are calm now ... demand is growing," said Naimi, who drove a change in the strategy of the Organization of the Petroleum Exporting Countries last year, when it decided not to adjust production despite a sharp fall in oil prices.
Oil prices collapsed by 60 percent between June and January to almost $45 a barrel, but have since recovered some ground.
Simon Wardell, oil analyst at Global Insight, said Naimi's comments reflected a desire for stability in the market.
"They want to find out where the floor price is. I think they are indicating that we are not that far off the floor in the current price," he said.
Yusuke Seta, commodity sales manager at Newedge Japan, said the China data was also a plus for oil.
"That's good news (as it means) potential oil demand, but I think the market needs to see more stable and concrete demand from China," he said.
(Additional reporting by Jane Xie in Singapore; Editing by Dale Hudson, Christopher Johnson and David Evans)