Investing.com -- Crude futures pared some gains after surging to fresh 11-month highs on Wednesday, as a bullish U.S. inventory report eased some concerns related to the massive supply glut that persists throughout energy markets worldwide.
On the New York Mercantile Exchange, WTI crude for July delivery traded between $50.33 and $51.34 a barrel before closing at $51.20, up 0.84 or 1.67% on the session. U.S. crude futures extended gains from the previous session when the front month contract for WTI crude closed above $50 a barrel for the first time this year.
On the Intercontinental Exchange (ICE), brent crude for August delivery wavered between $51.33 and $52.55 a barrel, before closing at $52.46, up 1.02 or 1.98% on the day. At session-highs, North Sea brent futures eclipsed the $52 level for the first time since early-October. Crude prices at the London-based ICE continued to receive a boost from a conflict in Nigeria, which has led to widespread output slowdowns among major producers throughout the Southern delta region of the nation.
U.S. crude futures have skyrocketed more than 90% since hitting 13-year lows at $26.05 a barrel on February 11.
On Wednesday morning, the U.S. Energy Information Administration (EIA) said U.S. commercial crude oil inventories decreased by 3.2 million barrels for the week ending on June 3. At 532.5 million barrels, U.S. crude oil inventories are still at historically high levels for this time of year. On the West Coast, crude stockpiles rose by 2.4 million barrels to 60.9 million, reaching its highest level since 2009. It was partially offset by a 1.4 million barrel draw at the Cushing Oil Hub in Oklahoma. Although stockpiles at the main delivery point for NYMEX oil fell to 65.6 million barrels last week, supply levels still remain near full storage capacity.
Analysts expected a draw of 2.8 million barrels, following a decline of 1.36 million a week earlier. On Tuesday evening, the American Petroleum Institute reported a drop of 3.6 million barrels last week.
Meanwhile, crude production nationwide increased by 10,000 barrels per day to 8.745 million bpd, halting a four-month streak of weekly declines. Over the last year, crude output in the U.S. has plummeted by nearly 1 million bpd. Last year at this time, daily production hovered around 9.6 million barrels, its highest level in more than 40 years.
Further gains in oil prices were limited by slowing economic activity in China, as oil imports fell in May to their lowest level in four-months. Earlier on Wednesday, China's General Administration of Customs reported that monthly crude imports fell to 32.24 million, amid rising congestion at a main port. China is one of the world's top importers of oil from the Middle East.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.35% to an intraday low of 93.41. The index has crashed by more than 5% since early-December. Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.
Despite the recent hot streak, crude futures are still down by more than 50% from their level two years ago when they peaked at $115 a barrel in June, 2014.