Global oil prices surged higher overnight despite a US government report which showed that the nation's inventories had risen by 2% over the week.
According to the Fairfax press, the report showed that crude oil storage in the US had risen to 434 million barrels, which represented an increase of 8.43 million barrels for the week. US supplies continue to rise and are now sitting at their highest levels in 80 years despite the closure of several hundred oil rigs across the country.
However, Brent crude prices still managed to rise 5% on Wednesday night, settling above US$61 a barrel after Saudi Arabia's oil minister said demand for oil was growing. The oil price has surged from a low of roughly US$45 a barrel just over a month ago with investors' concerns clearly easing over the market's oversupply situation.
The overnight rebound has certainly provided a boost for Australia's energy and gas stocks. Senex Energy Ltd (ASX: SXY) rose 3.1%, while Sundance Energy Australia Ltd (ASX: SEA) and Santos Ltd (ASX: STO) climbed 3.7% and 0.8% respectively. New Zealand Oil and Gas Ltd (ASX: NZO) surged 6.9% and BHP Billiton Limited (ASX: BHP) rose a modest 0.2%.
Although conditions are likely to remain volatile in the sector for some time yet, things are certainly looking better at this stage. Whether or not that will last still remains to be seen.
