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Oil prices are edging higher on reports that U.S. crude inventories have fallen more than expected.

Brent crude oil, the international standard, is trading at $64.06 U.S. per barrel, up 0.87%. U.S. benchmark West Texas Intermediate (WTI) crude oil is up 1% at $60.04 U.S. a barrel.

Oil prices are also getting a lift as diplomatic efforts to end the Russia-Ukraine war sputter, raising concerns over global supplies.

Data from the U.S. Energy Information Administration (EIA), shows America's crude inventory fell by 3.4 million barrels last week. Markets had expected a decrease of 600,000 barrels.

The drop in inventories points to increased refining activity and stronger export demand, say commodities analysts.

At the same time, expectations that an end to the conflict in Ukraine could lead to the lifting of sanctions on Russia's oil exports have evaporated, clouding the global supply outlook.

EIA data also showed that U.S. oil production decreased by 28,000 barrels per day (bpd) during the week ended Dec. 14.

U.S. crude oil imports increased by 729,000 bpd, while exports rose by around 1.34 million bpd.

The uncertainty surrounding crude oil has roiled the stocks of major oil producers such as Chevron (NYSE: $CVX ) and Shell (NYSE: $SHEL ).