Oil rose on both sides of the Atlantic on Wednesday, with the U.S. benchmark climbing to a 14-month high above $105 a barrel, buoyed by a sharp decline in fuel stockpiles in top oil consumer the United States.
But worries about a sluggish Chinese economy, underlined by bleak June trade data, kept a lid on gains.
U.S. crude rose $1.96 to $105.49 a barrel by 1310 GMT. Brent gained 71 cents to trade at $108.52.
"While oil demand in the U.S. appears to be reviving, current figures from China point to slowing demand dynamism there," a Commerzbank research note said.
The spread between Brent and U.S. oil <CL-LCO1=R> fell below $3 a barrel for the first time since December 2010 after data showed a drawdown in stocks.
U.S. crude stocks fell nearly 9 million barrels last week, compared with analysts' expectations for a drop of 3.3 million, according to the American Petroleum Institute. The U.S. Energy Information Administration is scheduled to release its inventory report later in the day.
Political risks were also supporting prices, and investors continued to keep watch on Egypt.
Egypt's new interim prime minister reached out to liberals on Wednesday to revive a shattered economy as he began forming a government to heal a nation divided by bloodshed a week after the elected president was overthrown.
China, the world's No.2 economy, warned of a grim outlook for trade as it surprised markets by reporting a fall in June exports and imports. Both had been expected to rise.
Its crude imports for the first half of the year fell 1.4 percent from a year ago.
"China is expected to stay below the 8 percent growth rate seen last year and might grow by 7.8 percent over 2013," a JBC Energy market report said.
"The slowdown of its economy has become a serious concern, and the latest trade data confirms that the country faces problems at its key export markets."
Despite the disappointing data from China, OPEC expects a stronger economy to boost world oil demand by 1 million barrels a day in 2014, the highest growth since 2010.
In its monthly report, the Organization of the Petroleum Exporting Countries said its share of the world market will decline next year due to rising U.S. shale oil supplies.