By Noah Browning
The Organization of the Petroleum Exporting Countries (OPEC), along with allies including Russia, announced supply cuts effective January 1 to tighten the market after worries over a global glut caused heavy price losses in late 2018.
Still, concerns over the outcome of U.S.-China trade talks, which have resumed in Washington, have jangled investors' nerves.
U.S. West Texas Intermediate (WTI) crude futures were up 3 cents or 0.06 percent at $54.26 per barrel at 1215 GMT.
Brent crude oil futures were up 22 cents or 0.36 at $61.87 per barrel. The March contract expires on Thursday.
WTI futures were up nearly 20 percent compared to their December close, while Brent climbed 15 percent.
Data from the U.S. Energy Information Administration (EIA) on Wednesday showed U.S. crude oil stockpiles rose less than expected last week due to lower imports, notably a fall in Saudi crude supply.
"Crude oil prices were stronger after signs emerged that OPEC cuts are impacting trade," ANZ bank analysts wrote in a note, calling it the second lowest weekly level since 2010.
U.S. sanctions imposed on state oil firm Petroleos de Venezuela SA (PDVSA) this week are also causing some supply disruptions.
Oil inventories have started to build up at Venezuela's oil ports and terminals as PDVSA is finding it cannot export crude at its usual rate due to U.S. sanctions imposed this week.
As of Wednesday, Venezuela had 25 tankers with nearly 18 million barrels of crude - representing about two weeks of the country's production - waiting to load or for authorisation to set sail, shipping data showed.
"With the likelihood of a forthcoming decline in Venezuelan production, producer cuts to rebalance the market will prove more effective," Harry Tchilinguirian, strategist at BNP Paribas in London, told the Reuters Global Oil Forum.
"Having said that, any gain in oil prices still remains contingent on the outcome of U.S.-China trade talks."
Global markets anxiously await the outcome of talks which began in Washington on Wednesday aimed at easing a months-long tariff war between the world's top two economies.
The two-day talks are expected to be tense, with little indication that Beijing will address core U.S. demands. If the two sides cannot reach a deal soon, Washington has threatened to more than double tariffs on Chinese goods on March 2.
(Reporting by Noah Browning in London; additional reporting by Henning Gloystein in Singapore; additional reporting by Colin Packham in Sydney; editing by Jason Neely and Elaine Hardcastle)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)