Oil prices hit fresh 2016 highs, pass $47

In this file photo taken with a long exposure, a pumping unit sucks oil from the ground near Greensburg, Kan. AP FILE PHOTO

NEW YORK, United States — Oil prices surged to 2016 peaks for the second straight day Wednesday after the Federal Reserve appeared more optimistic in its outlook for the global economy.

Prices fell in early trade after the weekly US Energy Department report showed US crude stockpiles jumped by two million barrels last week, slightly more than analysts expected.

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“We got a build in crude stocks… which seemed to bring some sellers out of the woods,” said Gene McGillian of Tradition Energy.

But the market rallied late in the session following the Federal Reserve’s policy announcement. As expected the Fed left interest rates unchanged, but it also appeared less concerned than a month ago about global conditions, opening the door a crack to a rate hike in June.

US benchmark West Texas Intermediate (WTI) for delivery in June rose $1.29 to $45.33 a barrel on the New York Mercantile Exchange, closing for the second straight day at its highest level since November.

In London, Brent North Sea for June delivery climbed $1.44 to $47.18 a barrel, also a peak last seen in November.

“The market continues to focus on expectations we’ll see declining North American production levels and increasing demand around the globe,” McGillian said.

The oil market’s recent trend higher is mainly being driven by technical factors, said Matt Smith of ClipperData.

“The breaking of resistance lines has given prices momentum to push higher from here. It’s like a snowball gathering momentum,” he said.