Oil soars on bets of no new highs in U.S. crude stocks

By Barani Krishnan

NEW YORK (Reuters) - Oil prices rose on Wednesday after industry data suggested the U.S. government was likely to report a smaller rise in crude inventories for last week compared to market expectations for a new record high in inventories.

Data from the American Petroleum Institute showed on Tuesday that U.S. crude oil inventories fell by 4.3 million barrels for the week to April 1. Analysts polled by Reuters had forecast a build of 3.2 million barrels that could take stockpiles to an eighth week of record highs, eclipsing the previous high of 534.8 million barrels.

The U.S. government's Energy Information Administration will release official inventory numbers at 10:30 a.m. EDT (1430 GMT).

"Since the beginning of last year, the API crude inventory number has varied on average by nearly 2 million barrels versus the EIA'S. Even so, it has tempered expectations of a solid build this time," said Matt Smith, director of commodities research at Clipperdata.

The New York-headquartered firm which tracks crude oil cargo movements into the United States said it detected "strong imports" last week from South and Central America, and separately five VLCCs (Very Large Crude Carriers) arriving in the U.S. Gulf of Mexico from the Arab Gulf.

But it also noted "some disruptions to imports" from fog in the U.S. Gulf that could scupper expectations of a large rise in domestic crude stocks.

U.S. crude oil futures were up 91 cents, or 2.6 percent, at $36.80 a barrel by 9:58 a.m. EDT (1358 GMT), after rising more than $1 earlier.

Brent futures rose 67 cents to $38.54.

Hopes for an agreement among major oil producers to freeze output also underpinned the market, helping U.S. and Brent crude futures to advance from the one-month lows struck in Tuesday's session.

Kuwait's OPEC governor said on Tuesday that a meeting of oil-producing countries in Doha on April 17 will deliver an agreement to hold output at January highs despite Tehran pouring cold water on the plan.

(Reporting by Dmitry Zhdannikov in LONDON Editing by Dale Hudson)