Crude futures turned positive Wednesday after weekly U.S. oil inventories didn't rise as high as an oil-industry group had indicated and demand for fuel products improved slightly.
Light, sweet crude for March delivery recently traded 18 cents U.S. higher at $99.13 U.S. a barrel on the New York Mercantile Exchange, after falling as low as $97.53 U.S. earlier in the session.
Brent crude on the ICE futures exchange traded two cents lower at $110.05 U.S. a barrel.
Oil prices bounced off lows after the Energy Information Administration reported that U.S. crude inventories rose by 3.6 million barrels last week. The build was much smaller than the 7.3-million-barrel increase the American Petroleum Institute reported in separate data late Tuesday.
Additionally, stockpiles fell for gasoline and distillate, which includes heating oil and diesel, and a measure of demand improved slightly from last week for both fuel products.
Gasoline stockpiles fell by 400,000 barrels, while distillates fell by 2.5 million barrels.
The data provided some indications of an improving picture for those betting on higher prices. Demand for fuel products has continued to reach new multi-year lows in recent weeks, and this week's data, which also showed a drop in refinery operations, suggests that the oil market is attempting to reach a better balance between supply and demand.
U.S. use of oil and fuels hasn't risen with broader economic data that point to a growing recovery, which has kept futures from pushing above $100 U.S. a barrel for most of the past month.
Demand for gasoline, the most widely used fuel product, fell by 5.2%, or 463,000 barrels a day, last week from the year-earlier period according to a SpendingPulse report released Tuesday by MasterCard Advisors LLC.
Gasoline demand has been lower than a year earlier for 21 straight weeks, and four-week demand of 8.263 million barrels a day is the lowest four-week level since SpendingPulse began releasing data in July 2004.
Still, tensions between Iran and the West are also helping to keep oil prices from slipping further.
The European Union Monday voted to slap an embargo on crude from Iran which would take full effect July 1. The delay will provide E.U. countries time to line up alternate sources of oil and offer Iran the opportunity to keep negotiating over its nuclear program, market observers said.
The E.U. imports about 600,000 barrels of oil a day from Iran, making it the recipient of about a quarter of Iran's crude exports.
The E.U.'s embargo follows U.S. approval of sanctions last month aimed at Iran's central bank, which processes the country's oil revenue. Those sanctions are due to take effect later this year.
Front-month February reformulated gasoline blendstock, or RBOB, recently traded 3.40 cents U.S. higher at $2.8390 U.S. a gallon. February heating oil recently traded 0.24 cents U.S. lower at $3.0218 U.S. a gallon.
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