Investing.com - Oil prices added to overnight gains in European trade on Wednesday, climbing to a fresh seven-month high amid speculation weekly supply data due later in the session will show U.S. crude inventories fell at a faster pace than expected last week.
The U.S. Energy Information Administration will release its weekly report on oil supplies at 14:30GMT, or 10:30AM ET, amid expectations for a drop of 2.5 million barrels.
Gasoline stockpiles are expected to fall by 1.1 million barrels while stocks of distillates, which include heating oil and diesel, are also expected to drop by 1.1 million barrels, according to analysts.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. oil inventories fell by 5.2 million barrels in the week ended May 20, compared to expectations for a decline of 3.3 million barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub for WTI dropped by 189,000 barrels, the API said, while gasoline inventories increased by 3.6 million barrels and distillate inventories declined by 3.0 million barrels.
Crude oil for July delivery on the New York Mercantile Exchange rose to a session peak of $49.45 a barrel, the most since October 12. It last stood at $49.30 by 08:05GMT, or 4:05AM ET, up 68 cents, or 1.4%.
A day earlier, New York-traded oil futures tacked on 54 cents, or 1.12%. Nymex oil prices are up nearly 85% since falling to 13-year lows at $26.05 on February 11 as declining U.S. shale output boosted sentiment. However, with prices now at levels that make drilling economical for some firms, the oil rig count might start rising soon and the decline in U.S. production may slow.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery added 66 cents, or 1.36%, to hit $49.27 a barrel after climbing to a daily high of $49.39.
On Tuesday, London-traded Brent futures shed 37 cents, or 0.76%, as traders eyed supply disruptions in Canada, Nigeria, and Libya.
Brent futures prices are up by roughly 85% since briefly dropping below $30 a barrel in mid-February, despite the collapse of talks at a Doha summit in April aimed at achieving a production freeze among OPEC and Non-OPEC producers. OPEC meets on June 2 in Vienna and may discuss the freeze initiative again.
Meanwhile, the WTI crude contract flipped to a premium compared to Brent for the first time since January, as U.S. crude is more affected by the loss of production in Canada.
Brent's discount to the West Texas Intermediate crude contract stood at 3 cents, compared to a gap of 1 cent by close of trade on Tuesday.