Oil prices have been on a roller coaster ride this week following a confusing February production report from OPEC leader Saudi Arabia, but to the delight of traders the U.S. Energy Information Administration on Wednesday reported domestic crude inventories decreased by 200,000 barrels during the week ended March 10.
The report follows even more bullish data from the American Petroleum Institute, which said Tuesday that crude stockpiles dropped by 531,000 barrels, sending oil prices back up above $48 a barrel in early Wednesday trading.
API's data showed a nearly 35-million-barrel build over the previous 11 weeks, according to some reports.
Still, after several weeks of large crude inventory builds reported by the EIA, the slight domestic draw this past week is like a breath of fresh air for traders who may have been slightly taken zback after Saudi Arabia reported it increased crude oil production in February from January.
The OPEC member nation later stressed that while it increased production month over month, its output was still well below the mark it promised to hit as part of OPEC's production cut agreement signed last year.
Saudi Arabia said it produced 10.011 million barrels a day in February in OPEC's monthly report, up 2.6% month over month. The Saudis added that they produced 9.748 million barrels a day in January.
Saudi Arabia is still producing oil well below its upper bound of daily production mandated by the agreement: 10.058 million barrels a day.
Shortly after the EIA data was released Wednesday, West Texas Intermediate crude contracts for April delivery were up nearly 2% to around $48.60 a barrel. The U.S. benchmark had fallen to below $48 a barrel in the previous trading session.
Assisting oil's upward trajectory Wednesday was the drooping U.S. dollar. And with the uptick in crude oil prices came the stocks of U.S. oil players like ExxonMobil (XOM - Get Report) , Chevron (CVX - Get Report) , Occidental Petroleum (OXY - Get Report) and EOG Resources (EOG - Get Report) , among others.
The week's next data point comes Friday in Baker Hughes' (BHI) active rig count, which has been on a steady rise in recent weeks as U.S. shale producers, which have spent the past two years cutting spending and operations, are eager to ramp production with oil prices around $50 a barrel.