Oil prices soar as US inventories grow less than expected

WTI was up 26%

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Oil prices spiked Wednesday after data showed inventories swelled less than expected.

West Texas Intermediate crude oil, the U.S. benchmark, climbed 33 percent to $16.40 a barrel after a weekly report from the Energy Information Administration showed inventories grew by 8.99 million barrels, less than the 10.62 million build that was expected.

U.S. inventories totaled 527.6 million barrels, up 10 percent from the five-year average for this time of year.

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WTI was already sharply higher after trial results showed promise for the use of Gilead Sciences’ drug remdesivir in treating COVID-19. The disease, which has reached pandemic proportions, has shut down huge swaths of the global economy, decimating demand for fuel and exacerbating the effects of a price war between Saudi Arabia and Russia, two of the world's biggest producers.

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A separate report from the American Petroleum Institute on Tuesday evening also showed a smaller-than-expected build.

Brent crude, the international benchmark, was up 12 percent at $22.96.

The API report showed crude oil stockpiles at Cushing, Oklahoma, a key U.S. oil hub, increased by 2.49 million barrels. Ahead of the API’s report, Cushing inventories had swelled to 59.7 million barrels, according to the U.S. Energy Information Administration. The storage facility tops out at about 76 million barrels.

An agreement reached earlier this month to cut production by 20 million barrels per day is set to go into effect on May 1.