Oil prices rallied to their highest this year after weakness in the US data on the back of disappointing data and a report by the EIA showing a smaller than expected growth in US stockpiles last week.
The US Energy Information Administration in their weekly inventory report, reported that oil stockpiles grew by 1.9 million barrels last week to 490.1 million barrels.
While the inventories remain at their highest since 1982, the weekly buildup was slower than the 4.2 million barrels predicted by the American Petroleum Institute and the 2.3 million barrels build consensus forecast of analysts polled by the Wall Street Journal.
According to the report, stockpiles in Cushing Okla., an important delivery and storage point for the benchmark Nymex Contract, fell for the first time in more than 21 weeks. Stockpiles in Cushing fell by 500,000 barrels to 61.5 million barrels.
Stockpiles at the storage hub have risen in recent weeks spurring concern among investors that the site could hit maximum capacity.
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,” John Kilduff, partner at Again Capital LLC in New York, told Reuters.
Also supporting the price rally was weakness in the dollar after government data on Wednesday showed that the economy grew at a slower rate than expected in the first quarter of 2015.
A weaker dollar helps boost demand for dollar denominated commodities like oil as it makes it affordable to holders of other currencies.
Light sweet crude for June delivery most recently advanced $2.08 or 3.65% to $58.8 a barrel on the New York Mercantile Exchange.
Brent for June delivery, the most widely used benchmark globally; most recently climbed $1.82 or 2.82% to $66.30 a barrel on the London based ICE Futures Exchange.
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