US oil price rallies on inventory report

US oil prices rallied Wednesday after an inventory report showed a smaller-than-expected increase in oil stocks. US oil benchmark West Texas Intermediate for May delivery settled 44 cents higher at $94.64 a barrel. European benchmark Brent oil futures for delivery in May closed at $105.79, down 44 cents. The US Energy Information Administration released a report Wednesday that showed US crude reserves grew by 250,000 barrels in the week ending April 5. The build pushed US commercial stocks to 388.9 million barrels, not far from the all-time record of 391.9 million barrels in July 1990. But the increase was far less than market expectations for a gain of 1.2 million barrels, according to analysts polled by Dow Jones Newswires. The report also showed a solid increase in refinery utilization, which jumped to 86.8 percent from 86.3 percent the prior week. The refineries jump means "demand for US crude is growing," said Andy Lebow, senior vice president for energy futures at Jefferies Bache. US oil prices also garnered upward momentum from the buoyant equity markets. Both the S&P 500 and Dow Jones Industrial Average were on track to post new record highs. The markets were propelled by US Federal Reserve meeting minutes that suggested the Fed would maintain aggressive stimulus policies until the job market improves. The strength in the US oil market was "mainly a correlation trade between the equity market and WTI," said Bart Melek of TD Securities.