Oil edged up less than 1% on June 12 on signs of inventory declines in the U.S. and news that Saudi Arabia will limit volumes of crude to some Asian buyers in July and deepen cuts to the U.S.

Saudi Arabia, the world's top oil exporter, will cut crude allocations to Asia in July to a total of about 300,000 barrels per day (bbl/d), deeper than in June, sources told Reuters. One source said volumes to the U.S. would be cut by about 35% in July.

Data from market intelligence firm Genscape estimating a draw of more than 1.8 million barrels at the Cushing, Okla., delivery point for U.S. crude futures last week added to the bullish sentiment, said traders who saw the data.

Brent crude futures LCOc1 rose 20 cents, or 0.4%, to $48.35/bbl by 1:10 p.m. EDT (1710 GMT), having hit a session high of $49.15. U.S. West Texas Intermediate (WTI) crude futures CLc1 gained 30 cents, or 0.7%, to $46.13, having peaked at $46.71.

Prices plunged about 5% last week after data from the U.S. Department of Energy showed a surprise increase in stockpiles.

"We think the market's negative reaction to a one-week counter-seasonal crude inventory build of 3.3 million barrels was excessive, at least relative to its lack of positive reaction to draws amounting to 10.9 million barrels in the previous two weeks of data," Standard Chartered analysts said in a note.

"We do not expect a repeat of the inventory increase this week; rather we see a further large inventory draw."

Some traders and analysts said the rise looked technical in nature, after WTI rallied and encouraged a similar move in the Brent market. But they said the move might prove fleeting.

"When you start to approach $45 a barrel in WTI, you're in an area where you do find some price support and I think there has been some evidence last week of investment flows coming back into crude oil," Petromatrix strategist Olivier Jakob said.

"You have to be careful not to be too optimistic for now," he said. "Physical differentials are still under pressure and the time structure is still under pressure in Brent. It's a bit premature to call for much higher oil prices."

Traders also noted the price rise came as data showed speculative traders had increased their investment in crude futures by taking on large volumes of long positions.

"Oil bulls have reset for a technical bounce," said Stephen Schork, author of the Schork Report.

While financial traders have confidence in rising prices, the physical market remains under pressure, especially due to a rise in U.S. drilling and output.

"The combination of a rebound in OPEC and Russian output in the first half of 2018 and growing U.S. production will probably push the market back into oversupply next year after being in a large deficit in the second half of 2017," Capital Economics said in a note.

"As a result, it now seems more likely than not that oil prices will fall back a little next year, even with continued growth in demand, rather than slowly rising as we had previously assumed. As such, we are lowering our end-2018 forecast for Brent from $65 per barrel to $55."