Oil prices reached 2016 highs on Wednesday, just days after oil-producing countries failed to strike an output freeze deal. Meanwhile, many market watchers considered that an oil-worker strike in Kuwait was propelling crude prices, but even after the Kuwait oil and gas industry called the strike off, prices went even higher.
Still, this may not be the cause of higher prices. According to Genscape's Brian Busch, "one of the things that really turned the market today is [that] for the first time, if you net out crude and distillate, we saw the first true draw of the two together," he said in an interview with CNBC's "Power Lunch," on Wednesday.
The director of oil markets and business development also noted that there's a strong sentiment in the market for higher oil prices.
As news emerged that the Kuwait strike ceased, oil prices dipped, only to surge amid new data from the U.S. Energy Information Administration, which said that crude stocks rose 2.1 million barrels last week, compared with Reuters' analysts forecasts of a 2.4 million-barrel build and industry group American Petroleum Institute's data showing a 3.1 million-barrel rise.
The agency also found that U.S. gasoline stockpiles ticked down slightly, while distillate fuel stocks fell by 3.6 million barrels. Production in U.S. oil fields continued its gradual decline, the data reflected.
The internationally traded Brent was up nearly four percent on Wednesday to settle at $45.77 a barrel, having earlier touched $45.82, its highest level since Nov. 26. U.S. oil settled 3.77 percent higher, at $42.63 a barrel.
In the same vein, the oil market remains oversupplied and oil producers continue to threaten to pump more crude into the glut. Market watchers are eyeing Saudi Arabia as reports emerged that the Kingdom is issuing bonds for the first time in 25 years.
John Kilduff, partner at Again Capital, told CNBC's "Power Lunch" that the Saudis are preparing for a market share battle.
"I think they're certainly hunkering down for a battle — an epic battle — for market share among the U.S. and Iran," he said. "They don't know what the future holds for them or oil prices, so they're getting ahead of it — making sure they can stay liquid."
Busch considers that if a market share war pans out between Iran and Saudi Arabia, "this market could turn upside-down fairly quickly."
As Iranians threaten to pump up production in efforts to return to pre-sanction output levels, which some analysts doubt is feasible, the Saudis aren't backing down, Busch noted. He thinks that the Saudis may in fact increase production, since they have "some of the cheapest production in the world."
All in all, the Saudis want low oil prices so producers with higher cost productions could go out of business, the experts noted.
"I think they definitely were upset with exactly how much production was starting to come out of North America and the U.S.," Busch told CNBC.
— Reuters contributed to this report.