European and U.S. crude-oil futures were higher in London Wednesday, after stockpile data and supply glitches tightened the markets.
Brent climbed higher in correction after three days of losses to retest the $106 per barrel level; the WTI front month contract rebounded above $98 per barrel.
"Crude oil prices rebounded strongly on Wednesday, supported by a softer U.S. dollar and strong gains in the global equity markets that increased risk appetite," Myrto Sokou, Senior Research Analyst at Sucden Financial, wrote in a note to clients.
March Brent crude on London's ICE Futures exchange was up 48 cents, or 0.5% at $106.26 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March was up 91 cents, or 0.9%, at $98.10 a barrel.
The sharper increases in WTI narrowed the gap between it and Brent still further. The price difference, known as the spread, is now just over $8 a barrel, the closest it has been since mid-October.
Brent is gaining some support from disruption to flows from the large Buzzard oil field and ongoing arbitrage of North Sea crude to South Korea, wrote JBC Energy analysts in a note to clients.
Later Wednesday close attention will be paid to U.S. weekly fuel inventory numbers from the Energy Information Administration.
"We expect an up to 2 million barrel build in the U.S. crude stockpiles, " Andrey Kryuchenkov of VTB Capital wrote in a note to clients. "However, we also expect a small Cushing draw that could support WTI prices at the end of the week."
A draw at Cushing, Okla., the main collection point and a bottleneck for U.S. crude, could be price-supportive because it would indicate less plentiful supply.
Recently the ICE's gas oil contract for February delivery was down $1.25 at $905 a metric ton, while Nymex gasoline for March delivery was up 158 points at $2.6189 a gallon.
