May crude gained nearly 2% to settle at $83.76 despite a government report showing crude stockpiles rose by 2.9 million barrels for the week ending March 26, topping a Platts estimate forecasting a 2.65 million-barrel buildup.
NEW YORK ( TheStreet) -- Crude oil futures gained nearly 2% Wednesday despite inventory data from the Energy Information Administration showing that stockpiles rose beyond expectations last week, and gasoline stocks unexpectedly increased. The government said crude stockpiles rose by 2.9 million barrels for the week ending March 26, topping a Platts estimate forecasting a 2.65 million barrel buildup. The EIA total also surpassed the 421,000 barrel rise put forth by the industry's own American Petroleum Institute late Tuesday. Even more surprising, the government said gasoline inventories experienced a mild build of 300,000 barrels last week. Ahead of the report, market analysts suggested those stocks would decline by 2 million barrels. Distillate fuel supplies, meanwhile, fell by 1.1 million barrels, nearly matching forecasts for a 1.2 million barrel drawdown. The May delivery crude contract finished at its session high, gaining $1.39, or 1.7%, to settle at $83.76 a barrel after dipping as low as $82.22 a barrel. Darin Newsom, senior analyst at Telvent DTN, said dollar weakness was overriding the bearish inventory figures and supporting commodities prices today. The dollar index, fell 0.5%, though Newsom also said the contract's move lower "could very well be a seasonal play, expecting demand to pick up." "Evidence of a strong rebound in the global movement of goods is continuing to accumulate. This had been the key remaining box yet to be ticked among the various aspects of overall rebound in global oil demand," said Barclays Capital analyst Paul Horsnell. "The middle of the demand barrel had been the last part to show fundamental strength, held back by the lagged delay in goods movements. However, the wait does appear to be over." May heating oil added 5 cents, or 2.2%, to settle at $2.18 a gallon and May gasoline rose by 3 cents, or 1.3%, to $2.30 a gallon. A weaker than expected private sector jobs report, which said employers shed another 23,000 jobs this month , weighed on stocks today . Elsewhere in the morning, President Obama offered up a plan to expand offshore drilling in the Atlantic region. The new call reflects a change in policy that restricted coastal drilling outside of the Gulf of Mexico for over 20 years, according to The Associated Press. Newsom also added that though the energy complex shrugged off the news, many are taking a wait-and-see approach until the plan comes together and becomes more actualized. Still, on an otherwise sluggish day in the equity market, investors gave oil service stocks a lift on Obama's proposal. The Philadelphia Oil Service Sector index advanced 1.2%. Drillers on the index surging roughly 2% or higher included Transocean ( RIG), Rowan ( RDC), Noble ( NE) and Nabors Industries ( NBR). The NYSE Arca Oil index climbed 0.5%. Chevron ( CVX) occupied the Dow's top performance slot throughout most of the session, gaining 53 cents, or 0.7%, to $75.83. Exxon Mobil ( XOM), meanwhile, shed 0.1% to $66.98 and ConocoPhillips ( COP) shed 0.2%, to $51.17. Thursday morning brings the EIA's natural gas storage report. Analysts polled by Platts project that 14 to 18 billion cubic feet were injected into storage in the week ended March 26. The May natural gas contract shed 10 cents, or 2.6%, to $3.87 per million British thermal units. --Written by Sung Moss and Melinda Peer in New York.