Oil prices hit their highest for this year on Wednesday after the first crude stock draw in five months at the U.S. Cushing, Oklahoma hub suggested an oil glut may be starting to ease.
Continue Reading Below
Government data showing a smaller-than-expected rise last week in crude inventories throughout the United States also aided sentiment, although some traders felt the market was ignoring bearish elements like higher production.
Oil has staged its strongest recovery this month since a selloff that began in June last year.
U.S. crude futures are poised to end April up nearly 25 percent and Brent up 20 percent, their biggest monthly gains since May 2009 when the global economy was starting to rebound from the financial crisis.
In Wednesday's session, prices rose about 3 percent, building to early strength that came from Wednesday's leadership reshuffle announced at Saudi national oil company Aramco.
U.S. crude futures were up $2 at $59.06 a barrel by 12:52 p.m. EDT (1652 GMT), after hitting a 2015 high of $59.33.
Continue Reading Below
Futures of Brent crude, the more widely-used benchmark, rose $1.70 to $66.34 after hitting its year high at $66.72.
The rebound was driven partly by the notion that the supply glut that caused prices to fall by half since last summer may be easing with higher demand projected ahead of the peak U.S. driving season.
Government data showed that U.S. crude inventories rose last week to hit a record high for the 16th straight week. But the build of 1.9 million barrels was smaller than the 4.2 million barrels cited by industry group the American Petroleum Institute and a forecast of 2.3 million in a Reuters poll.
Crude stocks at Cushing, the delivery point for U.S. crude futures, fell 514,000 barrels, the first decline since November. U.S. weekly crude production also rose slightly.
"Inventories at Cushing did finally draw down due to strong refinery demand, and that is supportive, since it will allay the fears of many that the operational storage capacity could be reached," said John Kilduff, partner at Again Capital LLC in New York.
Even so, Gene McGillian at Tradition Energy in Stamford, Connecticut, said the market "seems to be picking and choosing what to respond to, like ignoring the gains in production to focus on the draws and smaller builds."
(By Barani Krishnan; Additional reporting by Robert Gibbons and Jessica Resnick-Ault in New York, Christopher Johnson in London and Henning Gloystein in Singapore; Editing by Marguerita Choy)