Strong gasoline demand lifts oil prices after inventory data

Oil made a big turnaround on Wednesday. After having dropped to below $31, prices rebounded sharply after a report from the U.S. Energy Information Administration (EIA) reported that demand for gasoline rose more than expected and this overshadowed data that showed crude inventories rose.

The weekly report showed that crude inventories did not rise as much as feared last week. The US Energy Department said stockpiles rose by 3.5m barrels to 507.61m last week. Although the level was a new record, it arrived broadly in line with expectations.

What helped oil price rebound on Wednesday was the data showing gasoline stockpiles fell, indicating strong demand for the product. Gasoline demand rose 1.8 percent to 9.06 million barrels a day through Feb. 19, averaged over four weeks. Consumption was up 5.2 percent from the same period last year.

West Texas Intermediate for April delivery rose 28 cents, or 0.9 percent, to settle at $32.15 a barrel on the New York Mercantile Exchange. The contract fell as much as 4.1 percent to touch $30.56 before release of the report at 10:30 a.m. in Washington.

Brent for April settlement increased $1.14, or 3.4 percent, to $34.41 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude closed at a $2.26 premium to WTI, the most since December.

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