Oil climbs for fifth day as US output edges lower oil

US oil prices shot up to a 2015 peak Wednesday after a slight dip in US oil production sparked talk that the glutted petroleum market could be turning.

US benchmark West Texas Intermediate for May delivery jumped $3.10 to $56.39 a barrel on the New York Mercantile Exchange, the highest closing price since December 23.

European benchmark Brent oil for delivery in May rose $1.89 to $60.32 a barrel in London.

The gains extended a market rally into a fifth straight day.

Earlier in the day, the US Department of Energy reported US oil production fell by 20,000 barrels, or 0.2 percent, to 9.38 million barrels per day, in the week ending April 10.

US crude inventories stand at the highest level for this time of year in at least the last 80 years, the DoE said, but the increase last week was smaller than expected.

Analysts expressed caution at Wednesday's price surge.

"I think this rally will stall," said Matt Smith, an analyst at Schneider Electric. "We got quite a bit ahead of ourselves here."

Smith said it is likely still too soon for the lower US rig count to meaningfully dent supply.

"Yes, there are a couple of data points, but that doesn't mean the US is not overflowing crude," he said.

Meanwhile, the Paris-based International Energy Agency cut its supply forecast for non-OPEC countries, citing a lower outlook for US and Canadian production and the "worsening conflict" in Yemen.

The agency also bumped up by 90,000 barrels per day its forecast for 2015 petroleum demand. The IEA now expects 2015 consumption of 93.6 million barrels per day, up 1.1 million barrels per day for the year.