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Investing.com - West Texas Intermediate oil futures added to sharp gains in North America trade on Wednesday, after data showed that oil supplies in the U.S. fell for the first time in eight weeks last week.
Crude oil for May delivery on the New York Mercantile Exchange jumped $1.11, or 3.09%, to trade at $37.00 a barrel by 14:35GMT, or 10:35AM ET. Prices were at around $36.80 prior to the release of the inventory data.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 4.9 million barrels in the week ended April 1. Market analysts' expected a crude-stock rise of 3.2 million barrels, while the American Petroleum Institute late Tuesday reported a supply drop of 4.3 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, rose by 357,000 barrels last week, the EIA said. Total U.S. crude oil inventories stood at 529.9 million barrels as of last week.
The report also showed that gasoline inventories increased by 1.4 million barrels, compared to expectations for a drop of 1.0 million barrels, while distillate stockpiles rose by 1.8 million barrels.
A day earlier, Nymex oil prices closed up 19 cents, or 0.53%, at $35.89, after slumping to a daily low of $35.24, the weakest level since March 4. U.S. crude futures are down almost 15% since hitting a recent high of $41.90 on March 22. Despite recent losses, prices are still up nearly 35% since falling to 13-year lows at $26.05 on February 11.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for June delivery rose 86 cents, or 2.27%, to trade at $38.73 a barrel.
On Tuesday, London-traded Brent futures slumped to an intraday low of $37.27, a level not seen since March 4, before recovering to settle at $37.87, up 18 cents, or 0.48%.
Traders reacted to comments from Kuwait's OPEC governor Nawal Al-Fuzaia, who said that all signs suggest that a meeting of OPEC and non-OPEC oil producing countries in Doha on April 17 will result in an initial agreement to freeze output at February levels, or at an average of January and February levels.
The original proposal by Saudi Arabia, Qatar, Russia and Venezuela was for a freeze at January levels.
Doubts that oil producing countries would freeze output to address a global glut mounted last week after Saudi Deputy Crown Prince Mohammed bin Salman said that the kingdom will not cap output unless Iran and other major producers do so as well.
Iran has maintained that it will not contribute to any output freeze until its crude exports return to pre-sanction levels of around 4 million barrels a day.
Brent futures are down almost 12% from their March highs of $42.50 a barrel. Despite recent losses, prices are still up by roughly 35% since briefly dropping below $30 a barrel on February 11.
Short-covering began in mid-February after Saudi Arabia and fellow OPEC members Qatar and Venezuela agreed with non-OPEC member Russia to freeze output at January levels, provided other oil exporters joined in.
Meanwhile, Brent's premium to the WTI crude contract stood at $1.73 a barrel, compared to a gap of $1.98 by close of trade on Tuesday.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.