• U.S. crude inventories fell more than expected, driving Brent and WTI up nearly 5%.
  • The draw signals tighter near-term supply, adding to bullish sentiment in oil markets.
  • Analysts caution that while inventory data supports short-term rallies, longer-term headwinds from ample supply persist.

Oil futures surged on Wednesday after the U.S. Energy Information Administration reported a larger-than-expected decline in crude stockpiles, with Brent and West Texas Intermediate both gaining about 5% on the day. The draw, which exceeded analyst forecasts, suggested tighter immediate supply-demand dynamics, boosting prices that had already been supported by geopolitical concerns.

According to people familiar with the matter, the inventory drop was driven by a combination of higher refinery runs and robust export demand, though specific factors were not detailed. The move extended gains from earlier in the session, with WTI briefly touching $78 per barrel before settling near $77.50.

“A draw of this magnitude is always going to catch traders’ attention,” said one oil analyst, speaking on condition of anonymity. “It reinforces the narrative that supply is currently struggling to keep up with demand, especially with disruptions elsewhere.”

The data provided a fresh catalyst for a market already on edge due to ongoing tensions in the Middle East and production constraints from some OPEC+ members. However, several market participants noted that the rally might be short-lived, as the broader outlook for 2026 suggests a potential glut.

“We’re seeing a classic short-term reaction to inventory data,” said a senior trader at a European hedge fund. “But without sustained draws, prices could easily give back these gains.”

In early afternoon trading, Brent crude was up 4.8% at $82.15 a barrel, while WTI rose 5.1% to $77.42. The backwardation in the crude futures curve widened slightly, indicating market tightness.

Efforts to reach officials at the EIA for comment were unsuccessful. The agency is scheduled to release its next weekly report on Thursday.

Correction: An earlier version of this article misstated the percentage gain for WTI. It is up 5.1%, not 5.5%.