Investing.com - West Texas Intermediate oil futures held above the $50-level on Wednesday, but gains were likely to remain limited amid expectations weekly supply data due later in the session will show U.S. crude inventories rose to the highest level on record last week.
On the New York Mercantile Exchange, crude oil for delivery in April advanced 34 cents, or 0.66%, to trade at $50.86 a barrel during European morning hours.
A day earlier, Nymex oil prices jumped 93 cents, or 1.88%, to settle at $50.52 a barrel after the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 2.9 million barrels in the week ended February 27, below forecasts for an increase of 4.0 million barrels.
The report also showed that gasoline stockpiles rose by 530,000 barrels, while distillate stocks declined by 296,000 barrels.
Wednesday's government report was expected to show that U.S. crude oil stockpiles rose by 4.2 million barrels last week, while gasoline stockpiles were forecast to decrease by 1.9 million barrels.
According to industry research group Baker Hughes (NYSE:BHI), the number of rigs drilling for oil in the U.S. fell by 33 last week to 986, the lowest since June 2011.
The number of oil rigs has declined in 17 of the last 20 weeks since hitting an all-time high of 1,609 in mid-October.
Market players have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.
However, U.S. crude supplies are at the highest level in at least 80 years, indicating that cheap prices have yet to affect output.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for April delivery ticked down 42 cents, or 0.69%, to trade at $60.60 a barrel.
On Tuesday, London-traded Brent prices rallied $1.48, or 2.49%, to end at $61.02 a barrel after Saudi Arabia raised the official selling price for its oil to buyers in the U.S. and Asia.
The sharp increase continued the trend of volatile price fluctuations, as prices have wavered dramatically over the last several weeks. Daily oil prices have moved more than 2% in an up or down direction in 27 of the last 40 trading days.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $9.74 a barrel, compared to $10.50 by close of trade on Tuesday.
Oil prices have fallen sharply in recent months as the Organization of Petroleum Exporting Countries resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.