NEW YORK (MarketWatch) -- Oil futures surged 7% Wednesday to near $45 a barrel, as government data showed a surprising decline in U.S. crude inventories and China, the world's second-biggest oil consumer, is expected to release a new stimulus plan.
Crude oil for April delivery gained $3.02, or 7.3%, to $44.64 a barrel on the New York Mercantile Exchange. The contract plunged 10% Monday but has since recovered all of its losses.
U.S. crude inventories, excluding those in the Strategic Petroleum Reserve, fell by 700,000 barrels in the week ended Feb. 27, the Energy Information Administration reported. Analysts surveyed by Platts had expected an increase of 2.2 million barrels.
Inventories at Cushing, Okla., the delivery point for Nymex crude futures, fell for a third straight week from their record high, down 500,000 barrels to 34 million.
The EIA also reported gasoline inventories rose by 200,000 barrels, and distillate stockpiles, which include diesel and heating oil, rose 1.7 million barrels. Analysts surveyed by Platts had expected a decline of 600,000 barrels in gasoline inventories and a drop of 1.5 million barrels in distillate stocks.
Total products supplied over the past four-week period have averaged 19.5 million barrels per day, down by 1.3% compared with the similar period last year, the EIA reported. Among them, motor gasoline demand has averaged 9 million barrels per day, up by 2.2% from the same period last year.
Tuesday, the American Petroleum Institute reported that crude supplies fell by 463,000 barrels in the week ended Feb. 27. The API also said that gasoline supplies dropped by 642,000 barrels, while distillate stocks rose by 1.64 million barrels.
The Washington-based API, a trade association of the oil and natural gas industry, calculates inventories based on criteria different from those used by the EIA.
On the Nymex Wednesday, April reformulated gasoline rose 3.3% to $1.3641 a gallon, and April heating oil gained 3% to $1.2145 a gallon. April natural-gas futures fell 2.9% to $4.157 per million British thermal units.
China stimulus plan
Chinese Premier Wen Jiabao is considering new stimulus measures, adding to a $585 billion spending plan to revive the country's economy, former statistics bureau chief Li Deshui said in Beijing ahead of Thursday's National People's Congress.
"Crude prices were higher on increased optimism the Chinese economy would recover swiftly from the current downturn," wrote Nimit Khamar, an analyst at Sucden Financial Research.
Asian stocks rallied after the news and European stocks also rose. Meanwhile, shares on Wall Street also rebounded from recent slumps.
China is also reportedly considering using its foreign reserves to increase its crude supplies. Read more on Chinese plans to buy oil.
The Chinese Purchasing Managers' Index, used as a gauge of the health of the manufacturing sector, rose to 49.0 for February, up from 45.3 in January, data released Wednesday showed. The index had plunged to a record low of 38.8 in November. Read more on China's industrial data.
However, there was more grim economic data from other parts of the world.
In the U.S., private-sector firms cut 697,000 jobs in February, according to the ADP employment index.
In Australia, the economy contracted for the first time in eight years during the October through December period. Gross domestic product shrank 0.5% in the fourth quarter compared with the third, according to data released Wednesday. Read more on Australia's economic data.
OPEC meeting
Energy traders were also watching for what might come next from the Organization of Petroleum Exporting Countries.
Libya's top OPEC official, Shokri Ghanem, said Tuesday that there is still excess crude in the world oil market, which the cartel needs to remove either through better compliance with already announced cuts or through a new output reduction, Reuters reported.
The oil cartel has already announced a reduction in output of 4.2 million barrels a day since September, equivalent to about 5% of global oil demand. OPEC members will meet on March 15 in Vienna.
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