Oil futures mark rare spike as options expire

NEW YORK (Reuters) - Oil futures marked their strongest gain in more than two years on Wednesday, snapping a four-day losing streak as traders turned briefly away from the bearish pressures of a worldwide glut to focus on technical trading ahead of options expiration.

Both U.S. and Brent crude oil shook off a U.S. government report which showed that U.S. crude oil stockpiles rose far more than expected last week due to rocketing domestic production, as the market instead focused on technical trades.

Brent crude rose $2.10, or 4.5 percent, to settle at $48.69 a barrel, in its strongest daily percentage gain since June 2012. The benchmark hit a low of $45.19 on Tuesday, the lowest since March 2009, amid increasing U.S. stocks and a continuing global supply glut.

U.S. crude oil settled at $48.48 up $2.59, or 5.6 percent, the biggest gain since August 2012. U.S. gasoline futures lead the charge, rising more than six percent due to falling refinery rates.

Crude oil prices remained near six-year lows on Wednesday despite the spike. Prices have tumbled nearly 60 percent since June as strong global supply outpaces waning demand.

"The options expiry is definitely the main reason for the big rally just before the close. A lot of shorts are so deep into their put options, the only way to exit their position is to buy back futures," said Oliver Sloup, director of managed futures at iitrader.com LLC.

U.S. government data showed crude stocks rose 5.4 million barrels, more than 10 times what analysts had expected. Inventories at the Cushing, Oklahoma, delivery hub for the U.S. futures contract, rose 1.8 million barrels.

But the big builds in inventories may have been offset by figures showing an increase in demand, said Andrew Lipow, president of Lipow Oil Associates.

The spread between Brent and U.S. crude slimmed to just a few cents on Wednesday after closing on Tuesday at 70 cents.

"(With the) velocity of the downward trend that we've been in, you can expect to see any violent snapbacks," said Tariq Zahir of Tyche Capital.

Late on Tuesday, the World Bank lowered its 2015 and 2016 world economic growth forecasts, reinforcing worries about sluggish demand growth in the oversupplied energy markets.

(Additional reporting by Libby George and Himanshu Ojha in London, Henning Gloystein and Florence Tan in Singapore; Editing by Marguerita Choy and Christian Plumb)