Oil steadied on Thursday as growing expectations that global supply could fall significantly short of demand this year lent support, offsetting the negative impact of a rise in US inventories.
Gasoline stocks, however, continue to climb higher on the East Coast amid strong imports, resulting in a build on the aggregate despite a drop on the Gulf Coast, while distillate stocks have also eased amid lower refinery activity and higher implied demand, he said.
The United States announced sanctions on Venezuela's state oil company last week, a move which has yet to push prices up steeply but could still spark gains. Still, "more hard work is needed to turn this market unreservedly bullish".
Fritsch of Commerzbank said the Venezuelan issue could still drive oil higher.
U.S. West Texas Intermediate (WTI) crude futures were at $54.77 per barrel at 0223 GMT, up 21 cents or 0.4 percent.
Worldwide benchmark April Brent LCOJ9, +0.90% added 71 cents, or 1.2%, to $62.69 a barrel on ICE Futures Europe, after tapping a low of $61.05. The global benchmark crude was at an $8.36 premium to WTI for the same month.
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With fresh sanctions potentially looming, a flotilla loaded with about 7 million barrels of Venezuelan oil has formed in the Gulf of Mexico, some holding cargoes bought ahead of the latest USA sanctions and others whose buyers are weighing who to pay, according to traders, shippers and Refinitiv Eikon data. "The large draws in distillate. made sure that commercial oil inventories fell for the second week, this time by 3.4 million barrels", he said.
The oil price came under pressure earlier in the day following weekly data from the U.S. Energy Information Administration on Wednesday that showed an unwelcome increase in stocks of crude oil.
The Bloomberg Dollar Spot index has risen 1 percent this month, capping gains in crude and other commodities priced in the currency.
In his State of the Union address, U.S. President Donald Trump said a trade deal was possible with China.
But for those who prefer to scrutinize the trading community, then get set for more wild price swings: that was the message delivered by Robert McNally, president of Rapidan Energy Group, who said, "In this boom-bust era, as in prior ones, you can have a year or two of stability, but in general when you don't have an effective swing producer and you have big imbalances and geopolitical risk, there's volatility".
Venezuela's opposition is opening a USA fund to receive the proceeds of oil sales, a key measure to secure revenue for its effort to dislodge President Nicolas Maduro, an opposition lawmaker said on Wednesday.