Brent crude oil pares gains on record high US inventory

Brent oil prices pared gains sharply on Wednesday after data showed US crude stocks jumped to a new record last week, overshadowing weakness in the dollar.

The US Energy Information Administration said US crude stocks jumped by 8.2 million barrels in the week to Friday, the highest in at least 80 years and surpassing expectations of a 5.1 million barrel build.

Crude stocks at Cushing, Oklahoma, delivery point of the US crude contract rose by 1.9 million barrels, also hitting a record level.

Brent crude oil was up 34 cents at $55.45 a barrel by 1453 GMT, but that was well off an earlier high of $56.25.

US light crude oil was up 8 cents at $47.59 per barrel, off an earlier high of $48.37.

Providing support, the euro was up 0.4 per cent against the dollar, the currency in which crude oil futures trade.

The dollar lost 0.4 per cent against a basket of currencies, making dollar-traded commodities more attractive for holders of other currencies.

Germany, Europe's largest economy, saw business morale rise for the fifth month in a row in March, hitting its highest since July 2014, Ifo's business climate index showed.

Business morale also rose in France to its highest for nearly three years. A senior Gulf delegate of the Organization of the Petroleum Exporting Countries told Reuters on Tuesday that stronger-than-expected global oil demand should help support crude prices at around $55-$60 a barrel in the next two months despite some signs of a growing glut in the United States. Chinese crude oil stocks are also at historic highs and the country's commercial and strategic storage is almost full, a Sinopec trading executive told an industry forum.

With storage approaching its limit, China's oil imports will likely stay flat or rise only slightly this year, the official said.

China has been taking advantage of cheap oil to build up its strategic petroleum reserves, helping push its imports to record highs late last year despite an economy growing at its slowest pace in 25 years, but that process is now ending.