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Global oil prices gained ground on Wednesday, boosted by the weak dollar, as traders awaited the latest report on crude inventories in top global consumer the United States, analysts said.
Brent North Sea crude for delivery in February increased by 26 cents to $110.56 per barrel in early afternoon London deals.
New York's main contract, light sweet crude for February or West Texas Intermediate (WTI), gained 18 cents to $93.46 a barrel.
“Crude oil prices climbed higher on Wednesday, in a healthy correction, mainly supported by a weaker dollar that offered upside momentum,” said energy analyst Myrto Sokou at the Sucden Financial Research brokerage.
A faltering greenback makes dollar-priced oil cheaper for buyers using rival currencies, stimulating demand.
Later on Wednesday, the US government's Energy Information Administration (EIA) will publish its weekly report on American crude inventories for the week ending January 11.
Crude reserves are expected to increase by 2.1 million barrels and gasoline or petrol inventories are seen gaining by 2.3 million barrels, according to analysts polled by Dow Jones Newswires.
Inventories of distillates, including diesel and heating fuel, are expected to jump by 1.3 million barrels.
“Today, market participants will briefly turn their attention back to US energy fundamentals where the EIA delivers its weekly US fuel inventory report,” said VTB Capital analyst Andrey Kryuchenkov.
“We believe that crude imports into the US will continue to rise, helping a potential build in total US crude stockpiles in the same week...A mildly bearish inventory report is expected.”
In earlier Asian deals, oil prices had rebounded on data showing better-than-expected US demand for distillates.
A report by the private American Petroleum Institute showed that distillates stockpiles fell unexpectedly.
However, the market remains hindered by an impending showdown between Republican and Democrat lawmakers in the US Congress on raising the debt ceiling for the world's biggest economy.
President Barack Obama had warned Republicans on Monday against using the debt ceiling as a “bargaining chip” in budget negotiations but indications are that the stand-off will continue. - Sapa-AFP