Cushing inventories dropped 2.69 million barrels to 47 million last week, the report showed. Supplies reached a record 51.9 million barrels in the week ended Jan. 11 .

“We're seeing a reordering at Cushing, which is very supportive to WTI,” said John Kilduff, a partner at Again Capital LLC, a New York hedge fund that focuses on energy. “Cushing is no longer a bottleneck as new delivery routes have become available because of investment in pipelines and rail.”

Refineries operated at 92.4 percent of capacity, up 0.2 percentage point from the prior week and the highest level this year. Utilization rates usually peak during the summer months when U.S. gasoline demand rises.

Gasoline stockpiles unexpectedly fell 2.63 million barrels to 221 million. Inventories of distillate fuel, a category that includes heating oil and diesel, advanced 3.04 million to 123.8 million. Supplies of both gasoline and distillate fuel were projected to advance 1 million barrels in the Bloomberg survey.

Eoin Treacy's view Both Brent Crude Oil and West Texas Intermediate are trading in backwardation right across the futures curve suggesting not only short-term but potentially medium demand dominance. Considering the widely held perception of slowing global growth, the market may currently be more heavily influenced by the internal machinations of producing, storing and transporting the commodity and concerns surrounding Egypt.

West Texas Intermediate continues to extend the break back above $100 and a sustained move below that level would be required to question potential for additional upside. Brent Crude has been less explosive but is also extending its breakout from a short-term range.