Oil rebounds from 5-week low, WTI jumps +2.5%

Oil benchmarks on both sides of Atlantic extend the recovery mode from multi-week lows on Wednesday, on mounting expectations of out freeze and drawdown in crude reserves.

Oil awaits EIA report

Currently both crude benchmarks are seen extending to the upside, with WTI rallying 2.45% to $ 36.77 while the Brent oil rises +1.64% to $ 38.49. Oil prices is seen trading with size-able gains this session as sentiment remains buoyed after the API inventory report revealed that the US crude reserves declined for the first time in three weeks, offering some respite to the oil bulls.

The American Petroleum Institute reported late on Tuesday that US crude inventories fell by 4.3 million barrels over the week to April 1. Analysts had expected growth of about 3.2 million barrels.

Moreover, rising expectations that the official EIA stockpiles report due later today will also show a withdrawal, collaborated to the upside in the black gold. Markets predict crude reserves in the US to have expanded by another 3.1 million barrels, following a rise of 2.3 million barrels a week before.

Furthermore, markets believe that the output freeze talks may soon become reality as we head closer towards April 17 Doha OPEC producers meeting to discuss the oil output freeze deal, proposed earlier this year, in order to limit production at January levels. Meanwhile, the FOMC minutes will be also closely eyed for any further move on the USD priced-in oil.