U.S. oil prices jumped over 6 percent on Friday, posting their largest weekly gain since February, as drawdowns in U.S. crude stockpiles fed hopes that a punishing global oversupply may be nearing tipping point.
U.S. gasoline and diesel prices rallied along with crude, rising more than 5 percent each. Gasoline has been one of the strongest pillars of support for U.S. crude this year. Ultra low sulfur diesel, also known as heating oil, has rebounded this week on seasonally cold weather forecasts through late April.
Front month U.S. West Texas Intermediate (WTI) crude futures settled at $39.72 a barrel, up $2.46, or 6.6 percent, and gained 7.96 percent for the week. International Brent futures were up $2.38, or 6 percent, at $41.81 a barrel.
For the week, both benchmarks were on track to rise about 7 percent, their most since the week ended March 4.
"We are starting to draw crude inventories in the U.S." said Scott Shelton, energy broker with ICAP in Durham, North Carolina. "Run rates are rising and U.S. production is falling.
"This is very different I think than what was expected. The market perceives that these draws may continue as the Keystone outage will increase the likelihood," Shelton.