Oil prices surged as much as four percent after the latest report on US crude stockpiles, CNBC reported.
The EIA figures also revealed a surprise decrease in gasoline and distillate inventories, which helped mitigate worries that US commuters weren't soaking up enough gasoline to offset supply.
"We saw the biggest draw in (US) inventories for the year last week with stockpiles down more than 5 million barrels, and it looks like Opec's production cut is finally biting", said Greg McKenna, chief market strategist at brokerage AxiTrader.
In its monthly oil market report (MOMR), OPEC said the USA oil and gas companies have already stepped up activities in 2017 as they start to increase their spending amid a recovery in oil prices.More news: Graduates at Florida university turn backs in protest of DeVos speech
Production rose, however, and gasoline demand over the last four weeks was 2.5 per cent lower than at the same time period a year ago. United States light crude oil ended up US$1.45 higher at US$47.33 a barrel. Global benchmark, Brent Crude futures were up by 25 cents or 0.5% at $48.98 per barrel at 0028 GMT.
"As a result, U.S. crude oil production surpassed 9 mb/d in February 2017, about 0.5 mb/d higher than the low seen in September 2016".
Asian stocks edged higher for a third consecutive day on Wednesday as investors focused on strong corporate earnings and the dollar gave back some of its recent gains after a rise in political tensions.
In November past year, OPEC and other producers, including Russian Federation agreed to cut output by about 1.8 million barrels per day (bpd).More news: Andy Murray exits tournament, stunned by Borna Coric — ATP MADRID
Bake told the S&P Global Platts Crude Oil Summit that while oil inventories were shifting, with cargoes moving from the Atlantic Basin into Asia, the overall drawdown that many hoped for amid OPEC-led production cuts had not yet materialised. Aramco had previously maintained supplies to important Asian customers.
A day earlier, the American Petroleum Institute had reported the largest draw in inventories since January, at 5.789 million barrels, failing, however, to instill much optimism in a consistently pessimistic market. Floating storage has started to decline in places like Singapore.
Oil prices pared gains in mid-afternoon trade, as sentiment turned bearish, after the EIA raised its US oil production forecast to an average of 9.3 million barrels per a day (bpd) in 2017 and 10 million bpd in 2018.
Nigeria, which along with Libya is exempt from Opec cuts, is also expected to see a jump in output soon.More news: Ravens' John Harbaugh Defends Orioles In Growing Rivalry With Red Sox