LONDON: Brent crude oil rose towards $103 a barrel on Wednesday, recovering from a 14-month low hit last week as traders monitored maintenance work in the North Sea and as U.S. crude oil inventories fell.
Oil benchmarks on both sides of the Atlantic have fallen by more than 10 percent since mid-June and remain on track to post a second monthly fall against a backdrop of lower imports by the United States and slowing growth in China and Europe.
On Wednesday the U.S. Energy Information Administration said U.S. crude oil stocks fell by a greater-than-expected 2.07 million barrels last week, but inventories at Cushing, Oklahoma, the delivery point for U.S. crude oil contracts, jumped by 508,000 barrels.
The increase in Cushing was almost double the amount reported by an industry group on Tuesday and weighed on U.S. oil futures, even as the total fall supported international benchmark Brent.
Gasoline stocks fell but not by as much as expected, while distillates including diesel and heating oil rose.
"The larger-than-expected build at Cushing and decline in gasoline demand are negatives, as is the smallish gasoline drawdown," said John Kilduff, a partner at Again Capital LLC in New York.
Brent crude for October delivery was up 21 cents at $102.71 a barrel by 1437 GMT, rebounding from a 14-month low of $101.07 a barrel last week.
U.S. crude rose 15 cents to $94.01 a barrel after settling 51 cents higher on Tuesday on stronger U.S. economic data. Its discount to Brent was at $8.70 a barrel, having widened to its largest in two months on Monday at $9.41.
Traders were watching to see whether the Buzzard oilfield in the North Sea, one of the biggest contributors to physical supplies underpinning Brent futures contracts, would return quickly after shutting again for additional maintenance.
Industry sources said the field was due to resume exports on Thursday after output was stopped for work on a drilling rig. It had restarted Monday after being shut for maintenance since July.
VULNERABLE TO SURPRISES
"Prices have fallen so much the market is vulnerable to any supply surprises, including the new Buzzard work," said Andrey Kryuchenkov at VTB Capital in London.
"The market had been largely stripped of its risk premium, and funds had largely exited the market, so we could see this rebound continue."
Global oil supplies have been ample for much of the summer, despite violence in OPEC members Iraq and Libya, capping gains.
Conflict with Islamic State militants in northern Iraq has not prevented oil exports from the south from holding at substantial levels, while Libya's exports have risen despite month-long clashes between rival militias.
"We are seeing softer-than-expected demand, and in the absence of any further disturbing developments in geopolitical areas, the pressure remains on the energy complex," said Michael McCarthy, chief strategist at CMC Markets in Sydney.
In Europe, Ukrainian President Petro Poroshenko promised after negotiations with Russia's Vladimir Putin to work on a ceasefire plan to defuse the separatist conflict in the east of Ukraine.
Any significant moves towards a truce between Kiev and two rebel eastern regions could mean an eventual move towards ending sanctions on Russia, which have put pressure on the economy of the world's second-largest oil exporter.
Elsewhere, Saudi crude exports fell in June to their lowest levels in almost three years as oil use in its power sector rose, official data showed, though industry sources say OPEC's largest producer raised output in July.
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