Crude futures pared early gains Thursday after a report on U.S. oil stockpiles suggested U.S. fuel demand remains weak.
Light, sweet crude for February delivery recently traded 37 cents higher at $100.96 U.S. a barrel on the New York Mercantile Exchange, down from highs above $102 U.S. before the data was released.
Brent crude on the ICE futures exchange traded 70 cents U.S. higher at $111.36 U.S. a barrel.
The Energy Information Administration report on Thursday showed a 3.4-million-barrel decline in U.S. oil inventories for the week ended Jan. 13, which surprised analysts that had called for an increase. But a sharp dropoff in imports, combined with an increase in gasoline stocks and weak demand for the fuel has painted a bleak picture of domestic gasoline use.
Gasoline demand, for the current week was the lowest since February 2001, as measured by products supplied to the market.
The drop in gasoline use stands in contrast to improvements in broader U.S. economic data in recent weeks. On Thursday, weekly jobless claims fell to the lowest level since April 2008, and manufacturing data has also shown improvement since worries of a double-dip recession appeared last summer.
Those economic indicators have helped to keep oil prices above $100 U.S. a barrel as investors wager that crude demand will improve as industries recover and more commuters head to work.
With crude prices holding in a tight range, traders are skeptical that the Energy Department report will be able to knock oil from the triple-digit perch.
For one, tensions between Iran and the West over a potential European Union oil embargo has put a floor under prices, as investors fear that any escalation could quickly send oil higher.
Front-month February reformulated gasoline blendstock, or RBOB, recently traded 0.93 cents U.S. lower at $2.8161 U.S. a gallon. February heating oil recently traded 0.78 cents U.S. higher at $3.0212 U.S. a gallon.
