Oil prices climbed above $91 per barrel on Wednesday, ending a four-day run of losses, after crude oil stocks in top consumer the United States fell more than expected last week to their lowest in nearly three years.
U.S. light, sweet crude for February delivery rose $1.25 at $91.33 per barrel, after settling 97 cents lower on Tuesday when oil prices had swung around within a $4 range.
London Brent crude was up $1.33 at $91.45.
"Disruptions in crude imports generated a larger-than-expected draw for crude," said Chris Jarvis, senior analyst at Caprock Risk Management.
"Overall, the report is bullish regardless of the Cushing build of 100,000 barrels."
U.S. crude oil stocks fell 7.6 million barrels last week, their lowest since February 2005, according to the U.S. Energy Information Administration.
Analysts had expected a 1.6 million barrel drawdown, partly due to shipment delays caused by fog in the Houston Ship Channel.
Distillate supplies, which include heating oil, fell 2.1 million barrels, more than a 500,000 barrel drop forecast by analysts.
Gasoline stocks rose by 3 million barrels, when analysts had forecast a 1 million barrel increase.
Crude oil stocks at Cushing, Okla., the delivery point for crude oil futures traded on the New York Mercantile Exchange, rose by 100,000 barrels.
An increase in stocks at Cushing has helped depress U.S. crude oil futures prices relative to Brent crude, the North Sea crude oil benchmark.
The decline in U.S. inventories in the run up to winter has helped support the bullish case for oil, which hit a record of $99.29 a barrel on Nov. 21.
Equities, Credit, Subprime Fears
But oil is about $10 down from its record highs, partly due to worries over the vitality of the economy in the United States, the world's biggest oil consumer.
"Sentiment is bearish on the stocks markets, waiting for some further news on credit and subprime turmoil," said Marc Lansonneur, managing director commodities derivatives for French bank Societe Generale.
Morgan Stanley on Wednesday was the latest bank to reveal the impact of the credit market crisis, reporting a fourth quarter loss after writing off $9.4 billion of its exposure to high-risk U.S. mortgages and related securities.
The firm also sold a $5 billion stake to a Chinese state investment fund to bolster its capital.
Oil's longer term outlook is still bullish, however, given expectations of continued strong demand growth from emerging market countries including China, India and the Middle East.