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Crude capped a second-straight day of gains for the first time in more than a month after U.S. gasoline stockpiles fell more than estimated.

Gasoline supplies dropped 3.75 million barrels last week, according to a U.S. Energy Information Administration report Wednesday. A 2 million-barrel decline was forecast by analysts surveyed by Bloomberg.Crude stockpiles climbed by a less-than-anticipated 867,000 barrels to 534 million, the highest in weekly data going back to 1982. Refineries boosted the amount of crude they processed by the most in almost three years.

Oil slid last week to the lowest since November as rising U.S. stockpiles bolstered concern that production cuts by the Organization of Petroleum Exporting Countries and others will fail to ease a global glut. Production in Libya, an OPEC member thats exempt from the curbs, was said to drop 200,000 barrels a day after a pipeline carrying crude from the Sharara field -- its biggest -- stopped operating.

"Total inventories, when you include both crude and the products, are down, which is supportive," Adam Wise, who helps run a $7 billion oil and natural gas bond and private equity portfolio at John Hancock in Boston, said by telephone. "With refineries increasing runs youll expect to see a pull-down of crude inventories soon."

West Texas Intermediate for May delivery rose $1.14, or 2.4 percent, to $49.51 a barrel on the New York Mercantile Exchange. Its the highest close since March 8. Total volume traded was about 14 percent below the 100-day average.

Brent for May settlement climbed $1.09, or 2.1 percent, to $52.42 a barrel on the London-based ICE Futures Europe exchange,and closed at a $2.91 premium to WTI.

Analysts projected the report would show that crude supplies rose 2 million barrels last week, according to the Bloomberg survey.

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Refineries processed 16.2 million barrels a day of crude last week, up 425,000 barrels from the prior week, the report showed. It was the biggest weekly increase since June 2014. Refineries operated at 89.3 percent of capacity, up 1.9 percentage points from the prior week, and the highest since January. Refiners typically boost activity at this time of year as they prepare for the summer surge of gasoline consumption.

"The crude build came in under 1 million barrels, which is less than projected, which indicates to the market things are improving," Brian Kessens, a managing director and portfolio manager at Tortoise Capital Advisors LLC in Leawood, Kansas, who helps manage $17.1 billion in energy assets, said by telephone. "Demand for finished products is pretty strong as well."

U.S. gasoline demand increased 3.5 percent to 9.52 million barrels a day, the highest level since September. Total fuel consumption rose 3.2 percent to 19.9 million barrels a day.

Inventories of distillate fuel, a category that includes diesel and heating oil, fell by 2.48 million barrels to 153 million, the lowest this year.

April gasoline futures climbed 2.3 percent to close at $1.672 a gallon, the highest since March 7. Diesel for April delivery climbed 1.7 percent to $1.5425.

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Excerpt from:
Oil Gains as Libyan Crude Drop Offsets What OPEC Curbs Couldn't - Bloomberg