Oil market rebounds on US energy report

US benchmark West Texas Intermediate for May delivery climbed 64 cents to $56.38 a barrel compared with Friday's close (AFP Photo/Philippe Huguen)

New York (AFP) - Global oil prices rebounded sharply Wednesday after a mixed US oil inventories report left traders focusing on its positive elements for demand: falling gasoline and distillates stockpiles.

New York's benchmark West Texas Intermediate for April leaped $1.71 to close at $50.99 a barrel.

In London, Brent North Sea crude for April delivery, the global benchmark, settled at $61.63 a barrel, up $2.97 from Tuesday's close.

The US government's Department of Energy said Wednesday that crude inventories rose 8.4 million barrels in the week ending February 20 to a record 434.1 million barrels, more than double the increase expected.

However, the DoE also reported that stockpiles of distillates, which include diesel and heating fuel, slid 2.7 million barrels, while gasoline reserves sank by 3.1 million.

"The rally ... was fuelled by news that both gasoline and distillate stocks had decreased sharply last week," said Forex.com analyst Fawad Razaqzada. Falling stockpiles can indicate strengthening demand in the world's largest crude consumer.

For Gene McGillian of Tradition Energy, "the draw in products and gasoline suggests the drop we've seen in crude prices is starting to translate into increased demand, and I think that's why the market is picking up."

Crude prices have lost about half of their value since June.

"Brent crude oil is getting a modest lift from talk of firming demand as China's preliminary PMI data complemented comments from Saudi Arabian oil minister Ali al-Naimi citing a constructive shift to a calmer oil market supported by growing consumption," said Tim Evans of Citi Futures.

Brent also drew support from a report that Libya's Sarir oil field, which produces 185,000 barrels per day, was shut due to a loss of power supply, he said.

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