US oil surges, ends 5.8 pct higher after Fed statement

U.S. oil prices closed sharply higher on Wednesday, having extended gains after the Federal Reserve left rates unchanged.

WTI, also known as U.S. crude, settled at $38.46 a barrel, up 5.8 percent, or $2.12. The U.S. benchmark was up 3.9 percent higher 10 minutes before the statement's release.

Brent futures also extended gains, trading at $40.26 a barrel, up 3.92 percent. Before the announcement, the international trademark was 2.89 percent higher, at $39.86.

Earlier, oil prices gained as U.S. stockpiles grew by less than half the levels expected while major oil producers readied to meet in Qatar next month on output freeze plan.

The market is also the lookout for a Federal Reserve policy statement due later in the day to glean direction on U.S. interest rates.

Crude inventories in the United States grew by 1.3 million barrels in the week to March 11 to 523.2 million, hitting record highs for a fifth straight week, data from the Energy Information Administration (EIA) showed. Analysts polled by Reuters had expected a 3.4 million-barrel gain.

"The data is moderately bullish with crude builds less than expected, coupled with strong gasoline demand driven by lower prices at the pump," said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.

Oil prices, already up about 3 percent in early trade, gained further on the EIA data, before steadying ahead of the Fed announcement due at 2 p.m. EDT.

Earlier in the day, Qatari oil minister Mohammed Bin Saleh Al-Sada said producers from within and outside of the Organization of the Petroleum Exporting Countries will meet in Doha on April 17 to discuss output freeze plans. That helped crude prices resume their rally after a 5 percent slide over the past two sessions.

Around 15 OPEC and non-OPEC producers, accounting for about 73 percent of global oil output, support the output freeze initiative, the Qatari minister said in a statement.

Later in the day, a Saudi oil source said top OPEC producer Saudi Arabia fully supports an emergency meeting for oil producers in the Qatari capital Doha in April.

"Since Russia and other countries agree on having an emergency meeting for oil producers in Doha on April 17, Saudi Arabia fully supports this initiative," the source said.