Data released by the U.S. Energy Information Administration (EIA) on Wednesday morning showed a surprise 2.6 million barrel draw in crude inventories. Analysts had expected a 2.5 million barrel build.
"A few things happened," said Jim Ritterbusch, president of Ritterbusch and Associates, referring to the data released by the EIA.
"Crude imports dropped by half a million barrels per day, that contributed to the draw. We saw refinery runs increase more than expected by around 400,000 barrels per day so that ate up a lot of crude. And exports were up slightly," he said.
Gasoline stocks fell by 1.7 million barrels, compared with analysts' expectations in a Reuters poll for a 2.0 million barrels drop. Distillate stockpiles, which include diesel and heating oil, fell by 2.0 million barrels, versus expectations for a 1.7 million barrels drop, the EIA data showed.
Norbert Ruecker, head of macro and commodity research at Swiss bank Julius Baer said seasonally low demand at the end of the northern hemisphere winter meant he had "a rather cautious near-term outlook on commodities."
Investors have been particularly wary of the steep rise in U.S. output, which has grown by more than 20 percent since mid-2016, to 10.41 million bpd, putting the United States on track to become the world's largest oil producer this year.
Saudi Arabia's Crown Prince Mohammed bin Salman on Tuesday arrived in Washington for a state visit, raising speculation the United States could reimpose sanctions on Iran, following renewed criticism of the 2015 nuclear deal.