CORRECTED-UPDATE 6-Oil prices jump after U.S. crude inventories rise less than feared

(Corrects to gasoline 'draw', not 'build', in first paragraph)
* US crude stocks build less than expected, surprise
gasoline draw
* Some easing of lockdowns boosts demand prospects

By Laila Kearney
NEW YORK, April 29 (Reuters) - Oil prices surged on
Wednesday after U.S. crude stockpiles grew less than expected
and gasoline posted a surprise draw, adding to optimism for an
improvement in demand as some European countries and U.S. cities
move to ease coronavirus lockdowns.
Crude prices have been under pressure as fuel demand
worldwide has dropped by roughly 30%. Major oil
producing-nations agreed in mid-April to cut output by nearly 10
million barrels per day, while shale producers and oil majors
are also reducing production.
Brent crude futures LCOc1 were up $2.07, or 10%, at $22.54
a barrel by 11:30 a.m. EDT (1530 GMT). U.S. West Texas
Intermediate (WTI) crude CLc1 futures soared $3.80, or 31%, to
$16.10 a barrel following a plunge into negative territory last
week.
"As long as we see openings in the economy, we will not see
plunges like we saw a week ago," said Gene McGillian, vice
president of market research at Tradition Energy in Stamford,
Connecticut. "But markets heading back up to pre-crisis days are
going to be tough to come by."
U.S. crude oil inventories swelled by 9 million barrels last
week to 527.6 million barrels, about 7 million barrels below
their record high, the Energy Information Administration, but
slightly less than analysts' expectations in a Reuters poll for
a 10.6 million-barrel rise. EIA/S
More outstanding in the weekly data was the drawdown in U.S.
gasoline stockpiles of 3.7 million barrels from record highs
last week despite a rebound in refinery output as fuel demand
picked up modestly.
Gasoline demand is still down 44% over the past four weeks
from the year-ago period, but the week's drawdown suggests that
the consumption declines may be leveling off. Overall fuel
demand overall has dropped by 28% in the last four weeks.
"What stood out is the gasoline stockpiles - the market is
taking heart from that," said Gene McGillian, vice president of
market research at Tradition Energy in Stamford, Connecticut.
While U.S. storage is rapidly filling, crude production cuts
by U.S. shale producers - estimated by consultants Rystad Energy
at 300,000 barrels per day (bpd) for May and June - should help
slow flows into tanks.
Regulators in Texas, the biggest U.S. oil producing state,
will hold a vote on May 5 on whether to enact output cuts.
Officials in the states of North Dakota and Oklahoma are
also examining ways to legally allow output cuts. That would add to production cuts of almost 10 million bpd
agreed by the Organization of the Petroleum Exporting Countries
and other large producers including Russia.
Countries that have social distancing measures in place now
account for more than 90% of last year's oil demand, Morgan
Stanley research showed.
Hopes for some recovery in demand put a floor under oil
prices after two days of selling in June contracts by
exchange-traded funds looking to avoid the extreme volatility
that hit the WTI May futures contract last week.
"The other thing coming through is more detail and a louder
groundswell towards plans for removing COVID restrictions,
particularly in Europe," said Lachlan Shaw, head of commodity
research at National Australia Bank in Melbourne.