'Strong demand' pushes oil near $62

NEW YORK (CNNMoney.com) -- Oil prices jumped nearly 2 percent Wednesday after a report showed crude stocks fell further than expected in the latest week.

U.S. light sweet crude for April delivery settled up $1.13 to $61.82 a barrel in New York Mercantile Exchange trading. Before the Energy Information Administration released its report, the contract was up 39 cents at $61.08.

Crude oil inventories fell by 4.8 million barrels from the week ended March 2, versus forecasts for a gain of 2 million barrels according to Reuters.

Refineries operated at 85.8 percent of their operable capacity last week.

Crude oil imports declined 650,000 barrels per day from the previous week, caused by delays due to fog at the Houston Ship Channel. They averaged 8.9 million barrels per day last week, compared to 9.4 million barrels per day during the last four weeks.

"Even if you give them the benefit of the doubt that the delays caused a 650,000-barrel-a-day decline, that still doesn't account for the whole draw on the crude stockpile," said Phil Flynn, energy analyst at Alaron Trading. "This report showed very strong demand across the board - some weather-related, some not - and that's why we're seeing the price gains."

Oil prices have been steady in recent weeks, but are up $10 from mid-January levels. Oil has not felt a large impact from the global selloff in equities that began in late February.

Oil traders also watched Iran for any sign in the OPEC member's standoff with the United States regarding its growing nuclear program.

Total motor gasoline inventories fell by 3.8 million barrels last week. Gasoline inventories were expected to fall 1.4 million barrels last week, according to a Reuters survey.

Distillate fuel inventories, which are used for heating among other purposes, fell by 1.3 million barrels last week. The news service reported that distillates were expected to drop by 2.5 million barrels.

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Stocks struggle Wednesday after the rally