Brent crude prices were down 34 cents, or 0.6%, at $56.24 a barrel by 1512 GMT. Prices rose as far as $57.42 a barrel earlier in the session, the highest since Feb. 24.
The next milestone for Brent prices is a rise above $60, a level not seen since late January 2020.
U.S. West Texas Intermediate (WTI) was down 16 cents, or 0.3%, at $53.05, after hitting a session high of $53.93, its highest since Feb. 20.
“While I see crude prices trading higher over the coming months, investors need to be mindful that the road to higher oil demand and prices will remain bumpy,” UBS oil analyst Giovanni Staunovo said.
Governments across Europe announced tighter and longer coronavirus lockdowns on Wednesday over fears about a fast-spreading variant first detected in Britain, with vaccinations not expected to help much for another two to three months.
China recorded the biggest daily jump in COVID cases in more than five months, despite four cities in lockdown, increased testing and other measures aimed at preventing another wave of infections in the world’s second biggest economy.
Data indicating U.S. crude inventories last week as well as Saudi oil production limits capped losses, however.
Crude stocks in the U.S. dropped by 5.8 million barrels last week to around 484.5 million barrels, data from the American Petroleum Institute showed late on Tuesday. [API/S]
That was far more than analysts’ expectations in a Reuters poll for a fall of 2.3 million barrels.
Official Energy Information Administration inventory data is expected later on Wednesday.
Saudi Arabia cut supplies of crude for February loading for at least three Asian buyers while meeting requirements of at least four others, several refinery and trade sources told Reuters on Wednesday.