Investing.com - Oil prices turned sharply higher in European trade on Wednesday, amid speculation weekly supply data due later in the session will show U.S. crude inventories rose at a slower pace than expected last week.
The U.S. Energy Information Administration will release its weekly report on oil supplies at 15:30GMT, or 10:30AM ET, amid expectations for a gain of 3.9 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. oil inventories rose by 4.4 million barrels in the week ended March 4, compared to forecasts for a gain of 3.0 million barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub for WTI increased by 692,000 barrels, the API said.
The API data also showed that gasoline inventories decreased by 2.2 million barrels, compared to expectations for a drop of 1.5 million barrels, while distillate stockpiles fell 128,000 barrels.
Crude oil for April delivery on the New York Mercantile Exchange jumped 56 cents, or 1.53% to trade at $37.06 a barrel by 10:30GMT, or 5:30AM ET.
A day earlier, New York-traded oil futures tumbled $1.40, or 3.69%, as gloomy trade data from China revived concerns about slowing global growth, prompting market players to lock in gains from a recent rally which took prices to three-month highs above $38 a barrel.
Since falling to 13-year lows at $26.05 on February 11, Nymex oil prices have rebounded by approximately 33% as a decline in U.S. shale production boosted sentiment.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for May delivery tacked on 65 cents, or 1.64%, to trade at $40.30 a barrel. On Tuesday, London-traded Brent futures sank $1.19, or 2.91%.
Brent soared to a three-month peak of $41.04 earlier this week amid continued hopes major oil producers will meet later this month to discuss a potential output freeze.
Brent futures are up by roughly 30%, 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.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by OPEC last year not to cut production in order to defend market share, driving down prices by more than 70% over the past 20 months.
Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at $3.24 a barrel, compared to a gap of $3.15 by close of trade on Tuesday.