Oil is at a 7-month high

US crude is hovering at its highest point since October 2015.

West Texas Intermediate touched $49.28 in early trade in London on Wednesday, its highest point in 7 months. WTI is up 1.28% to $49.24 at 7.10 a.m. BST (2.10 a.m. ET).

Here’s how that looks over the long-term:

UK Brent is usually more expensive than US crude but the tables have been reversed on Wednesday morning. At the time of writing UK Brent is up 1.28% at $49.23. It’s the first time the US price has been more or less on a par with the UK price since mid-January, according to CMC Markets chief analyst Michael Hewson.

Hewson says in an email this morning: “The rally in oil prices was driven by a big draw of 5m barrels, well over expectations when the latest API data was released last night.”

API is the American Petroleum Institute, which measures the supply of oil in the US. Traders are hoping the 5 million supply drop may be a sign that the oversupply to the market has peaked. The drop also smashed expectations, with a Reuters poll predicting a 2.5 million barrel slide and S&P Global Platts forecasting a 3.3 million decline.

The surge in oil prices helped US stock markets to rally overnight too, with all major indices recording a gain over 1%.

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