Crude oil is surging

Crude oil is surging.

On Wednesday morning, the price of West Texas Intermediate crude oil was up almost 3% to $49 a barrel.

The rally is somewhat puzzling one, as the latest data from the EIA released at 10:30 am ET showed that crude oil inventories rose more than expected.

Crude inventories in the US rose by 4.8 million barrels last week, bringing crude oil inventories to $471.4 million barrels, yet another record high over the last 80 years.

A general oversupply of the oil market, largely spurred by supply from US shale drilling, has been blamed for the crash in oil prices seen over the last six months.

The spike in crude prices also coincided with reports that an oil platform in the Gulf of Mexico run by Mexican state-controlled oil company Pemex had caught fire.

Here's the spike in crude.

fut_chart (16)

(FinViz)

And here's a chart from a Barclays research note earlier this week that shows the astounding build in crude inventories this year.

barclays oil

(Barclays)

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