The rally started earlier in the week, as USA supply data from the Energy Information Administration and disruption in Libyan oil supplies heartened traders.
Growing U.S. supply is expected to partly offset cuts by the Organization of the Petroleum Exporting Countries and their partners, said Rahul Prithiani, director at CRISIL Research.
The risk of an even faster sell-off will be seen as a major risk by most oil-producing countries, providing further motivation for the OPEC deal to be extended, Birch added.
This significant reduction in Libyan oil output along with the ongoing output-cut by OPEC countries tightened global oil supply and improved its prices.
"While it remains possible Russian Federation can scrape together a combination of outages and natural decline at some west Siberian brown fields and spin this as a 300,000-bpd output cut, it is highly unlikely Russian Federation will achieve an absolute 300,000 bpd reduction during the tenure of the current agreement", it added.
"I see no sign from OPEC and Saudi Arabia that they will not roll over the cut into the second half of the year. the market is about to go from supply surplus to deficit on crude " said Scott Shelton, energy futures broker with ICAP in Durham, North Carolina.
US oil stockpiles rose by 867,000 barrels last week, and supplies of refined products dropped, according to data from the Energy Department, adding momentum to oil prices after supply disruptions from Libya helped boost futures earlier.
USA crude futures were down 19 cents at $50.16 a barrel after slipping back below $50.
Factory output shrinks 1.2% in February amidst falling economic activity
The annual increase strengthened to 1.2% from 0.2% previously, although this was notably lower than the expected figure of 2.0%. This was along a 1.1% fall in output of non-durable consumer goods, a wide category including fresh vegetables and clothing.
Recent disclosures reveal that producers rushed to lock in oil prices above US$50 a barrel after OPEC's November announcement about production cuts.
Michael Wittner, the global head of oil research at Societe Generale, said USA data on inventories for crude oil were concerning because of the steady build, but bullish for products like gasoline and diesel.
The United States Oil Fund (USO) jumped 2.2% Wednesday in regular trading. It is also the third time this year that US exports exceeded a million barrels a day, an industry record.
Brent for May settlement, which expired yesterday, slipped 13 cents to US$52.83 a barrel on the London-based ICE Futures Europe exchange.
- Concern that OPEC output cuts have driven a surge in production from rival US drillers may prevent an extension of the caps - yet prices won't suffer much, according to the chief economist at Russia's state-owned Vnesheconombank. The global benchmark crude traded at a $2.52 premium to WTI. But increasingly supportive rhetoric from OPEC nations to extend the cuts into latter part of 2017 has helped brighten market sentiment.
Meanwhile, investors anxious that the faster pace of output from US shale and crude producers could dampened OPEC's efforts to reduce the supply and demand imbalance in the industry.
An armed group in Libya shut pipelines Monday because of a dispute over wage issues, disrupting production of 250,000 barrels a day.