Crude oil futures gained almost 2% on Wednesday as investors mulled a report showing signs of increased US diesel and heating oil consumption and as the dollar dipped against major currencies.
Crude for July delivery advanced $1.73 to $101.32 a barrel on the New York Mercantile Exchange.
The Energy Information Administration reported a surprise increase in crude inventories, which pressured oil prices earlier in the session. Crude supplies
rose 600,000 barrels in the week ended 20 May confounding expectations of 1.6m barrel decline. An increase in supplies indicates slower consumption.
However crude prices recovered when the EIA data revealed that US distillate supplies, which includes heating oil, fell 2.04m barrels to 141.1m last week, a two-year low.
Gasoline stockpiles rose again, by 3.8m barrels, as refiners increase production.
The weaker dollar made crude oil futures more attractive as an alternative investment. Crude was boosted the previous session after investment banks such as Goldman Sachs raised their price forecast for crude.
Gold futures traded higher on Wednesday and settled at the highest level since the start of May on lingering concern about euro zone debt problems.
Gold for June delivery increased $3.40 to $1,526.70 an ounce on the Comex division of the New York Mercantile Exchange.