The price of oil rose to near $99 a barrel on Wednesday, driven by a report of falling U.S. stockpiles of crude and ahead of the conclusion of a meeting of the Federal Reserve.
By early afternoon in Europe, benchmark oil for July delivery was up 20 cents to $98.64 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 67 cents to close at $98.44 a barrel on the Nymex on Tuesday.
The American Petroleum Institute said late Tuesday that U.S. crude stocks fell by 4.3 million barrels last week, a much steeper draw than expected. The API report helped the Nymex contract reach a nine-month high.
The Energy Department's Energy Information Administration will release its own report — the market benchmark — later Wednesday.
Data for the week ending June 14 was expected to show a decline of 1 million barrels in crude oil stocks and an increase of 1.2 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill.
In Washington, the Fed will follow the end of a two-day meeting with a news conference by its chairman, Ben Bernanke.
To help support the U.S. economic recovery, the Fed has been buying $85 billion in bonds every month in an attempt to keep long-term interest rates low and encourage lending. The new money generated has flowed into the financial system, helping many assets, including oil, to climb from the lows witnessed during the global recession following the 2008-2009 financial crisis.
Investors want to hear later Wednesday from Bernanke if the Fed plans to gradually phase out its bond-buying program. Markets have been volatile over the past weeks as uncertainty about the Fed's intentions rattled investors. Recent data that shows the U.S. economy recovering in fits and starts has led few analysts to expect the Fed to wind down its program in the very near term.
"Our best guess is that the Fed will wait until the September meeting and even then the tapering will begin with a very modest reduction in the monthly purchases," to perhaps $65 billion per month, Capital Economics analysts said in a research note.
Brent crude, a benchmark for many international oil varieties, was up 10 cents to $106.12 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex:
— Wholesale gasoline added 0.26 cents to $2.8732 a gallon.
— Heating oil rose 0.89 cents to $2.9722 per gallon.
— Natural gas gained 3.3 cents to $3.938 per 1,000 cubic feet.
Pamela Sampson in Bangkok contributed to this report.