The price of North America's crude oil benchmark gained more than four per cent to trade above $47 US on Wednesday as a report from the Energy Information Administration showed crude inventories fell by 2.1 million barrels in the last week.

A barrel of West Texas Intermediate was trading at $47.05 US at close of trading on Wednesday, up $2.47 on the day. The catalyst for oil's surge was EIA data showing that American oil stockpiles are finally starting to go down, falling by 2.1 million barrels to 455.89 million barrels in storage.

The oil market has been massively oversupplied for months as U.S. shale producers flooded the market with new product in a time when the global economy is slowing. That has dragged down prices from over $100 a barrel last summer to less than half that today.

But Wednesday's EIA report showed that oil in storage tanks at the Cushing, Oklahoma, delivery hub fell by 1.906 million barrels. That's the biggest drawdown at Cushing in more than 18 months.

"The data provides a bullish data point for crude oil given the bigger-than-expected drawdown in stocks," Chris Jarvis, analyst at Caprock Risk Management in Maryland, told Reuters.

Beyond storage, EIA data Wednesday showed that U.S. oil output appears to have peaked in April of this year at 9.612 million barrels per day, before declining. Output for this month is expected to be below nine million barrels per day for the first time this year.

"The market remains oversupplied, but the pace of stock builds is moderating," Energy Aspects said in a report. "The Asian demand outlook is not rosy but it is not collapsing either."

The Canadian dollar, whose fortunes are closely tied to the price of oil, rallied a little on oil's strength, gaining 0.43 of a cent to 75.92 cents US.

The Toronto Stock Exchange, which is also closely correlated to the price of oil, gained 307 points or more than two per cent to trade at 13,770 in the afternoon. U.S. oil companies followed suit, with the energy sector of the S&P 500 up almost two per cent.