Oil futures rallied more than 5% Thursday ahead of the three-day long weekend, reducing their weekly loss to less than 1%, as a smaller-than-expected increase in inventories and an early release of profits from Wells Fargo & Co. boosted investor sentiment. Crude oil for May delivery rose $2.74, or 5.6%, to $52.12 a barrel in early North American electronic trading on Globex. The rally reduced oil's weekly loss to 0.6%. "Crude is in a solid trading range right now and you are seeing some technical buying," said Zachary Oxman, managing director at TrendMax Futures. "However, I don't think the [inventories] numbers were enough to drive the market this much, so it seems to me that we were seeing a bit of a trading rally," he added. Helping boost investor optimism Thursday, San Francisco-based Wells Fargo said it expects to record profits for the first quarter of roughly $3 billion, or 55 cents a share. U.S. stocks rallied after the bank's statement. The fact that crude has broken the psychologically important level of $50 a barrel also helped improve investor sentiment, said analysts at Commerzbank. Meanwhile, crude inventories rose 1.7 million barrels in the week ended April 3, the Energy Information Administration reported Wednesday. Analysts had expected an increase of more than 2 million barrels. Despite a smaller-than-expected increase in inventories, stockpiles in the U.S., the world's biggest oil consumer, still stood at the highest level in 16 years. Meanwhile, the EIA also reported petroleum demand over the last four-week period fell 4.4% from a year ago. "The data is a clear indicator that the recession has changed consumer behavior," said James Williams, an economist at energy research firm WTRG Economics. Also on Thursday, May reformulated gasoline rose 5.49 cents, or 3.8%, to $1.4945 a gallon and May heating oil gained 4.04 cents, or 2.9%, to $1.4385 a gallon. May natural-gas futures rose 5.5 cents, or 1.5%, to $3.685 per million British thermal units.

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