Smaller Crude Oil Inventories Boosts Oil Stocks

A report by the U.S. government on Wednesday indicated that crude supplies rose 1.29 million barrels last week, marking the smallest weekly gain since the seven-day period ending January 2. Analysts were expecting a gain of 3.6 million barrels for the week.

The report, issued by the Energy Information Administration, resulted in West Texas Intermediate for May delivery to spike 3.4 percent to $55.12 a barrel at 11:04 a.m. on the New York Mercantile Exchange on heavier than normal volume. The commodity touched $55.44, the highest it has traded at since December 29, 2014. Brent for May settlement also rose 2 percent to $59.57 a barrel on the ICE Futures Europe exchange following the U.S. government report.

Equities And ETF Movers

The VelocityShares 3X Inverse Crude ETN linked to the S&P GSCI Crude Oil Index Excess Return DWTI plunged more than 12 percent. By contrast, the United States Oil Fund LP (ETF) USO jumped 4 percent.

DWTI Price data by YCharts

Several drilling and exploration names were leading the rally after the report's release. Ocean Rig UDW Inc ORIG, an offshore drilling contractor saw its shares surge nearly 10 percent. Energy XXI Ltd EXXI, an independent oil and natural gas exploration and production company were also trading higher by nearly 10 percent.

Shares of large-cap energy-related companies were also rallying, led by a 3.6 percent jump in shares of Halliburton Company HAL and a 3.1 percent jump in shares of Hess Corp. HES.

Mega-cap energy-related companies were also higher, albeit not as much. Shares of Exxon Mobil Corporation XOM gained 1.7 percent while shares of Chevron Corporation CVX were trading higher by 1.2 percent.