Oil prices climbed above $57 a barrel on Wednesday, extending sharp gains from the previous session, after the first decline in US distillate stocks in nearly two months.
US crude rose 18 cents to $57.15 a barrel by 1822 GMT, after climbing $2.96 on Tuesday. London Brent crude
climbed 5 cents at $56.44.
US distillates stocks fell for the first time in seven weeks due to a cold snap in the US Northeast, the world's largest heating oil market.
Distillates inventories fell 2.6 million barrels last week, the Energy Information Administration said, 400,000 barrels more than analysts' expectations.
"The decline in distillates stocks did not reflect the higher consumption and the cold weather because of high inventories built up before Christmas," said Joseph Arsenio of Arsenio Capital Management.
"If the cold weather persists over the next weeks, the market would need to replenish its supplies."
Private forecaster DTN Meteorlogix predicted temperatures next week to average below to well below normal in the US Northeast.
Oil prices initially fell after the release of the EIA report as traders reacted to the larger-than-expected increase in US crude stocks.
Crude supplies rose 2.7 million barrels, more than double expectations for a 1.1 million barrel increase. Petrol supplies also jumped a larger-than-expected 3.8 million barrels.
"The market is testing the idea that this data was not bearish enough and focusing on things like the cold weather and the cuts in Opec production," said Tim Evans of Citigroup Global Markets.
- REUTERS
