U.S. oil prices ended nearly $2 higher on Wednesday, after government data showed a larger-than-expected drop in inventories, while gains in Brent were capped by expectations for increased Iranian and Libyan supply.
The rally was exacerbated by the nearing expiration of both oil contracts which forced traders to buy contracts and cover positions.
Ultra low-sulfur diesel futures rose to a more than one-week high after the U.S. government reported stocks of distillates, which include heating fuel and diesel, fell as the market expected supplies to grow. Gasoline inventories saw a surprisingly large build as arctic-like weather last week kept drivers off the road.
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