The price of oil moved up closer to $98 a barrel Wednesday, spurred on by a report indicating a fall in U.S. crude stockpiles.
By early afternoon in Europe, benchmark oil for March delivery was up 33 cents to $97.84 a barrel in electronic trading on the New York Mercantile Exchange. On Tuesday, it rose 48 cents.
A report late Tuesday from the American Petroleum Institute showed a drop of 2.3 million barrels in U.S. crude stockpiles last week. If confirmed by data from the Energy Department's Energy Information Administration to be released later Wednesday, it would be the first fall in crude supplies in over a month.
A survey of analysts by Platts, the energy information arm of McGraw-Hill Cos., was expecting crude stocks to have risen by 2.5 million barrels in the week ending Feb. 8.
The draw in crude stocks "could have a significant impact on WTI prices, especially if they are in line with upcoming EIA figures," said analysts at JBC Energy in Vienna. WTI, or West Texas Intermediate, is the benchmark U.S. crude.
Prices advanced despite a cut in the International Energy Agency's forecast for global crude demand this year.
The Paris-based IEA lowered its consumption expectations by 85,000 barrels a day compared with its figures from a month ago, mirroring the IMF's trim to its forecast for world economic growth in 2013, to 3.5 percent from an earlier projection of 3.6 percent.
Despite the downward revision, the IEA still expects the world to use 90.7 million barrels of crude oil a day this year, or 1 million barrels a day more than OPEC's estimate, released Tuesday, of 89.7 million barrels a day.
Looking ahead, traders are awaiting the release of U.S. retail sales figures for January to help gauge the country's economic growth.
Retail sales rose in December as consumers spent more on autos, furniture and clothing. But consumer spending, which accounts for about 70 percent of U.S. economic activity, could slow as a result of higher payroll taxes that took effect under the deal cut by Washington lawmakers at the end of last year to avoid the so-called fiscal cliff.
"January's retail sales report is eagerly anticipated as it will provide the first real guide to how the payroll tax hike affected spending," Paul Dales of Capital Economics wrote in a market commentary.
Brent crude, used to price international varieties of oil, was down 1 cent to $118.65 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex:
- Wholesale gasoline added 0.68 cent to $3.0571 a gallon.
- Natural gas rose 4.1 cents to $3.271 per 1,000 cubic feet.
- Heating oil fell 0.11 cent to $3.2351 a gallon.