Oil prices jumped 6% today, heading for the largest weekly gain in a month, as drawdowns in US crude stockpiles fed hopes that a punishing global oversupply that has lasted nearly two years may be nearing tipping point.
US petrol and diesel prices rallied along with crude, rising more than 5% each.
Petrol has been one of the strongest pillars of support for US crude this year.
Ultra-low sulphur diesel, also known as heating oil, has rebounded this week on seasonally cold weather forecasts through late April.
Brent crude futures were up $2.45, or 6.2%, at $41.88 by 4.20pm Irish time.
US crude futures gained $2.53, or 6.8%, to $39.79 a barrel.
For the week, both benchmarks were on track to rise about 8%, their most since the week ended 4 March.
"We are starting to draw crude inventories in the US" said Scott Shelton, energy broker with ICAP in Durham, North Carolina. "Run rates are rising and US production is falling.
"This is very different I think than what was expected. The market perceives that these draws may continue as the Keystone outage will increase the likelihood," Mr Shelton added.
US crude stockpiles fell by nearly five million barrels last week versus analysts forecasts for a build of 3.2 million barrels, government data showed.
The shutdown of the Keystone crude pipeline that delivers oil to Cushing also contributed to a drop of more than 480,000 barrels at the Oklahoma delivery point for US crude futures in the five days to Tuesday, data from market intelligence firm Genscape showed.
Some traders also cited optimism over an upcoming meeting of major oil producers in Doha in April that was intended to set in motion a plan to freeze production at January's highs.
"You mix that with outages in Nigeria ... and put Doha on top of it, and your eyes are looking towards the tightening of the market," said Bjarne Schieldrop, chief commodities analyst at SEB Bank in Oslo.
