Short-term, the market is getting a boost from US sanctions on Venezuelan oil exports.
United States crude oil inventories climbed by 1.3 million barrels in the week that ended February 1 to 447.21 million barrels, data from the Energy Information Administration (EIA) showed on Wednesday.
According to the Weekly Petroleum Status Report, U.S. crude oil imports averaged 7.1 million barrels per day last week, up by 63,000 barrels per day from the previous week, while crude oil exports saw a daily average of 2.9 million barrels, up by 926,000 barrels per day from the previous week. The government's official supply report is due later on Wednesday. Pressuring prices are renewed concerns over rising US crude inventories and record production levels.
He said the API figures showing rising stocks "do little to silence the us glut alarm bells".
Oil prices fell on Thursday after USA crude inventories rose and as production levels in the country held at record levels, but OPEC-led supply cuts and Washington's sanctions against Venezuela supported markets.
"This is either because the market assumes that the size of the impact will not be large, or at least it will be of short enough duration", they wrote.
Global economic worries have weighed on market sentiment in recent days, offsetting support from signs that global supplies are tightening. Oil fell on Tuesday after a survey showed euro zone business expansion almost stalled in January.
With a nervous market, traders are focussed on the US State of the Union address by President Donald Trump at 0200 GMT.
Senior U.S. and Chinese officials are poised to start another round of trade talks next week.
Supply cuts by the Organization of the Petroleum Exporting Countries and its allies, including Russian Federation, have been supporting prices.
The producers known as OPEC+ started cutting production by 1.2 million barrels per day (bpd) from last month to avert a new supply glut, and OPEC has delivered nearly three-quarters of its pledged cuts already, a Reuters survey showed last week.
The sanctions will sharply limit oil transactions between Venezuela and other countries and are similar to but slightly less extensive than those imposed on Iran a year ago, experts said on Friday after looking at details posted by the Treasury Department. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. A stronger dollar makes greenback-denominated commodities more expensive for holders of other currencies.