Investing.com - West Texas Intermediate oil futures came off the lowest levels of the session and hit intraday highs in North America trade on Wednesday, after data showed that oil supplies in the U.S. registered an unexpected sharp decline.
Crude oil for June delivery on the New York Mercantile Exchange rose 71 cents, or 1.59%, to trade at $45.37 a barrel by 14:34GMT, or 10:34AM ET. Prices were at around $44.23 prior to the release of the inventory data after hitting an intraday low at $43.97 and having peaked earlier at $44.97.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories unexpectedly fell by 3.41 million barrels in the week ended May 6. Market analysts' expected a crude-stock rise of 0.714 million barrels, while the American Petroleum Institute late Tuesday reported a supply gain of 3.5 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, rose by 1.52 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 540 million barrels as of last week, which the EIA considered to be “historically high levels for this time of year”.
The report also showed that gasoline inventories decreased by 1.231 million barrels, compared to expectations for a drop of 0.71 million barrels, while distillate stockpiles fell by 1.647 million barrels, compared to forecasts for a 1.007 million decline.
A day earlier, Nymex prices jumped $1.22, or 2.81%, as fires in Canada's oil sand field region forced a week-long shutdown, knocking out around 1.5 million barrels of daily crude production.
However, oil sands companies around the Canadian energy hub of Fort McMurray began to restart operations on Tuesday, with firms expecting to gradually ramp up production in the coming days.
Nymex oil prices are up nearly 55% since falling to 13-year lows at $26.05 on February 11, as a decline in U.S. shale production boosted sentiment. However, analysts warned that market conditions remained weak due to an ongoing glut.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery jumped $1.18, or 2.64%, to trade at $46.70 a barrel after rallying $1.89, or 4.33%, on Tuesday amid production declines and disruptions in Libya and Nigeria.
An ongoing fight by Middle East producers for market share in Asia weighed on prices. Iran has set its June official selling prices for heavier crude grades it sells to Asia at the biggest discounts to Saudi and Iraqi oil since 2007-2008, the latest sign that producers are willing to accept low prices in return for market share.
Brent futures prices are up by roughly 60% since briefly dropping below $30 a barrel in mid-February, despite the collapse of talks at a Doha summit in April aimed at achieving a production freeze among OPEC and Non-OPEC producers. OPEC meets on June 2 in Vienna and may discuss the freeze initiative again.
Meanwhile, Brent's premium to the WTI crude contract stood at $1.11 a barrel, compared to a gap of 86 cents by close of trade on Tuesday.