NEW YORK - Oil rose more than 3 percent to above $76 a barrel on Wednesday in the biggest one-day percentage gain in about five weeks after U.S. inventory data showed crude oil inventories in the world's top energy consumer fell more than expected.
Commercial crude oil stockpiles fell 4.9 million barrels to 327.5 million barrels last week, according to weekly inventory data from the U.S. Energy Information Administration, far exceeding the 900,000-barrel drop forecast by analysts.
U.S. crude for February settled at $76.67 a barrel, up $2.27.
Crude oil climbed as high as $77 a barrel on Wednesday for the first time since December 4. The contract has gained about $7 since December 14 when it hit a nearly two and a half month low.
London Brent crude for February settled at $75.45, up $1.99.
"The headline figures are all bullish, with bigger drawdowns in crude and distillates," said senior commodities analyst Mike Zarembski at Optionsepress in Chicago. "With the dollar (falling) it looks like the bulls are taking advantage."
The U.S. dollar moved lower, pressured by data showing that U.S. new home sales unexpectedly fell to a seven-month low last month.
A weaker greenback often encourages investor interest in dollar-denominated commodities like crude oil.
SWIMMING IN SUPPLIES
Despite the heavy draws in both products and crude, some analysts pointed out that supplies of petroleum and petroleum products remained plentiful.
"It really doesn't change the supply perspective of the market that much because we're still swimming in distillates, not just here in the U.S. but globally," said Addison Armstrong, director of market research, Tradition Energy in Stamford, Connecticut.
Lower imports into the United States as well as year-end drawdowns in crude stocks for tax purposes were the primary factors in the lowering crude inventories, analysts said.
"That means we may see a rebound in imports later, after the end of the tax year, in January, or a buildup in stocks elsewhere, including OECD, Asia and places where we don't measure stocks as well," said Antoine Halff, first vice president and deputy head of research at the Newedge Group in New York.
The Organization of the Petroleum Exporting Countries's (OPEC) decision to leave its output unchanged despite concerns over the group's ability to get producers to comply with quotas garnered little reaction in oil markets.
Commercial crude oil stockpiles fell 4.9 million barrels to 327.5 million barrels last week, according to weekly inventory data from the U.S. Energy Information Administration, far exceeding the 900,000-barrel drop forecast by analysts.
U.S. crude for February settled at $76.67 a barrel, up $2.27.
Crude oil climbed as high as $77 a barrel on Wednesday for the first time since December 4. The contract has gained about $7 since December 14 when it hit a nearly two and a half month low.
London Brent crude for February settled at $75.45, up $1.99.
"The headline figures are all bullish, with bigger drawdowns in crude and distillates," said senior commodities analyst Mike Zarembski at Optionsepress in Chicago. "With the dollar (falling) it looks like the bulls are taking advantage."
The U.S. dollar moved lower, pressured by data showing that U.S. new home sales unexpectedly fell to a seven-month low last month.
A weaker greenback often encourages investor interest in dollar-denominated commodities like crude oil.
SWIMMING IN SUPPLIES
Despite the heavy draws in both products and crude, some analysts pointed out that supplies of petroleum and petroleum products remained plentiful.
"It really doesn't change the supply perspective of the market that much because we're still swimming in distillates, not just here in the U.S. but globally," said Addison Armstrong, director of market research, Tradition Energy in Stamford, Connecticut.
Lower imports into the United States as well as year-end drawdowns in crude stocks for tax purposes were the primary factors in the lowering crude inventories, analysts said.
"That means we may see a rebound in imports later, after the end of the tax year, in January, or a buildup in stocks elsewhere, including OECD, Asia and places where we don't measure stocks as well," said Antoine Halff, first vice president and deputy head of research at the Newedge Group in New York.
The Organization of the Petroleum Exporting Countries's (OPEC) decision to leave its output unchanged despite concerns over the group's ability to get producers to comply with quotas garnered little reaction in oil markets.
