Investing.com - West Texas Intermediate oil rallied to the highest levels of the session in North America trade on Wednesday, after data showed that oil supplies in the U.S. fell unexpectedly last week.
Crude oil for delivery in March on the New York Mercantile Exchange jumped $1.03, or 3.7%, to $28.98 a barrel by 15:35GMT, or 10:35AM ET. Prices were at around $28.07 prior to the release of the inventory data
The U.S. Energy Information Administration said in its weekly report that crude oil inventories declined by 754,000 barrels in the week ended February 5. Market analysts' expected a crude-stock rise of 3.55 million barrels, while the American Petroleum Institute late Tuesday reported a supply gain of 2.4 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, increased by 523,000 barrels last week, the EIA said.
Total U.S. crude oil inventories stood at 502.0 million barrels as of last week, remaining near levels not seen for this time of year in at least the last 80 years.
Gasoline inventories increased by 1.3 million barrels, compared to expectations for a gain of 0.5 million barrels, while distillate stockpiles rose by 1.3 million barrels.
A day earlier, prices collapsed $1.75, or 5.89%, to close at $27.94, as a bearish report from the International Energy Agency forecasted a further widening of the supply-demand imbalance on global markets.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for April delivery rose $1.23, or 4.09%, to trade at $31.55 a barrel. On Tuesday, London-traded Brent sank $2.56, or 7.79%, amid ongoing concerns over a global supply glut.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share.
Oversupply issues will be exacerbated further as Iranian exports return to the global oil market.
Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at $2.57, compared to a gap of $2.38 by close of trade on Tuesday.