Oil rises after surprise drop in U.S. inventories; stocks tick up

Crude oil prices rose to a 15-month high on Wednesday after a surprise U.S. inventory drawdown, boosting energy shares.

WTI crude CLc1 hit its highest since July 2015 after the Energy Information Administration said U.S. stockpiles fell by 5.2 million barrels in the week ended Friday, dashing analysts' expectations for a build.

Stocks in the financial sector were boosted by Morgan Stanley's (MS.N) better-than-expected quarterly profit, which rounds out a string of solid results from the largest U.S. banks.

"We do expect better earnings and we are encouraged by good financial earnings recently with strong fixed income trading," said Jeff Kravetz, regional investment director at the Private Client Reserve at U.S. Bank in Phoenix, Arizona.

"Overall it's looking to shape up to be a pretty good earnings season."

Energy stocks were boosted by the higher oil prices and helped offset a near 6-percent decline in shares of Intel after a disappointing revenue forecast.

"The severe weakness in energy prices really took a toll. We've had a few starts up only to see prices fall, but this time it seems different, the price holding for longer and investors are warming to the sector," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

"Better energy prices are seen as a statement that maybe the economy is a little bit stronger," he said.

The Dow Jones industrial average .DJI rose 72.11 points, or 0.4 percent, to 18,234.05, the S&P 500 .SPX gained 7.63 points, or 0.36 percent, to 2,147.23 and the Nasdaq Composite .IXIC added 8.17 points, or 0.16 percent, to 5,252.01.

The S&P 500 energy sector .SPNY rose 1.7 percent.

The pan-European STOXX 600 index rose 0.3 percent, following a 1.5 percent rise in the previous session. MSCI's gauge of stocks world wide .MIWD00000PUS rose 0.4 percent.

U.S. crude CLc1 was up 2.2 percent at $51.39 a barrel and Brent LCOc1 last traded at $52.48, up 1.6 percent on the day.