Oil leaps 2.5 pct as U.S. stockpiles fall

Oil prices surged 2.6 percent on Wednesday after a report from the U.S. government showed an unexpected fall in crude inventories in the world’s largest energy consumer, pulling supplies down from 6-year peaks.

U.S. light sweet crude ended up $1.31 to $50.98 a barrel, breaking the $50 mark for the first time since May 12. Brent crude settled $1.25 higher at $50.07 a barrel.

The strength in prices brings crude oil more than 10 percent above its low of $46.20 hit last week — a trough that had been encouraged by swelling U.S. crude stockpiles and the highest OPEC output in 25 years.

Wednesday’s gains came after the U.S. Energy Information Administration reported U.S. crude stocks fell last week by 1.6 million barrels, countering expectations of another build.

Higher refinery demand and limited imports going into summer will likely spell additional declines in stockpiles, which had risen sharply over the past 15 weeks to their highest level since 1999, the EIA said.

Reuters