The U.S. oil benchmark scored its biggest one day jump in three weeks Wednesday after weekly government data showed a large and unexpected fall in U.S. crude inventories and an increase in demand by refineries.
On the New York Mercantile Exchange, West Texas Intermediate crude futures for delivery in May advanced $1.86, or 5.2%, to close at $37.75 a barrel. The jump was the biggest since March 16, according to Bloomberg MarketWatch.
June Brent crude on London’s ICE Futures Exchange rose $1.97, or 5.2%, to finish at $39.84 a barrel.
The U.S. Energy Information Administration said oil inventories fell by 4.9 million barrels in the week ended April 1 as analysts had forecast an inventory rise of 2.9 million barrels.
The inventory decline was the biggest for this week of the year since at least 1997. In addition, the data showed U.S. refineries used over 16.4 million barrels a day on average, up 199,000 barrels from a week earlier. Refiners operated at 91.4% of operable capacity last week, the data showed.
Oil futures previously found support on revived hopes that key global producers may agree to a production freeze later this month despite an escalating clash between Iran and Saudi Arabia over the issue.
Prices rose after Kuwait expressed confidence that players within and outside the bloc will move ahead with the proposal to limit crude output.
Oil prices have been mostly flat for months on speculation of a possible production freeze. Some analysts say that even if an agreement is reached at the OPEC meeting in Qatar on April 17, the move is unlikely to make any significant dent given persistent oversupply. Others view it as a step forward rebalancing the market.
May natural gas futures fell 4.3 cents, or 2.2%, to end at $1.911 per million British thermal units.
