Oil prices advanced to their highest in 2015 on a lower than expected weekly growth in US stockpiles and a bullish demand forecast from the International Energy Agency.
The Energy Information Administration reported on Wednesday that inventories in the US grew by only 1.3 million barrels to 483.6 million barrels.
Although, the total stockpiles in the inventories remained at a record level for the 14th consecutive week, the growth was the least since the week ending January 2nd.
The weekly growth was well below the 4.1 million barrels consensus forecast of a panel of analysts polled by Reuters.
“We’re at the cusp of a major change,” Matt Sallee, who helps manage $17.7 billion in oil-related assets at Tortoise Capital Advisors in Leawood, Kansas, told Bloomberg by phone.
“Production is stabilizing and set to move into decline faster than people expected.”
Light Sweet crude for May delivery closed up $3.10 or 5.8% higher on the day to $56.39 a barrel on the New York Mercantile Exchange.
A straight five session gaining streak has put the US benchmark at its highest level since December 23 2014.
Brent Futures, the global benchmark jumped $1.89 or 3.2% to $60.32 a barrel on the London-based ICE futures Exchange. The global benchmark is now at a month high following a straight five session winning streak- its longest since June.
The IEA, which keeps oil data in western countries, also said that supply would fall in line with demand in the second half of 2015 with demand expected to slowly pick up and ease the glut.
It, however, added that the Organization of the Petroleum Exporting Countries OPEC led by Saudi Arabia had increased their production to above 31 million barrels a day in March exceeding the 30 million ceiling they had set for themselves.
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