U. S. crude oil futures surged nearly 6 percent to end above $70 a barrel on Wednesday as refined product futures rallied on supportive inventory data and traders shrugged off a big increase in crude oil supplies. New York Mercantile Exchange natural gas November futures lost ground as concerns about record high storage, fairly mild near-term weather and a steeply discounted cash market continued to weigh on front months.

IN FOCUS:

The EIA said crude stocks rose 2.8 million barrelsto 338.4 million barrels last week, far bigger than the forecast for a 600,000 barrel increase in a poll. The gain matches the increase reported by the American Petroleum Institute on Tuesday.

Total crude processing volume in October for South Korean refiners will be about 4 percent higher than in September as some want to reduce their inventory before year-end, asurvey showed on Thursday.

Apoll on Wednesday showed inventories were expected to climb 61 bcf when the weekly EIA storage report is released on Thursday.

Data from the EIAon Tuesday showed that gross domestic gas production of 62.55 billion cubic feet per day in July stood at 1.4 percent below July 2008 levels, the first time this year output has fallen below year-ago levels.

FUNDAMENTAL OUTLOOK:

Crude oil witnessed a remarkable jump yesterday despite bearish inventory report from EIA. We expect crudeoil to remain subdued by $1-1.5in the day. Any further weakness in dollar and rise in equities backed by strong economic data may prompt some fresh buying in crude oil.