The price of oil held above $97 a barrel Wednesday, awaiting data expected to show rising crude inventories and a further cut in U.S. central bank stimulus.
By early afternoon in Europe, benchmark U.S. crude for March delivery was down 10 cents to $97.31 a barrel in electronic trading on the New York Mercantile Exchange. On Tuesday, the Nymex contract surged 1.8 percent, or $1.69, to close at $97.41.
Analysts have forecast U.S. oil supplies rose last week, suggesting weaker demand. Weekly stockpiles data is likely to show increases of 2.1 barrels in crude oil stocks and 1.6 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The report from the industry-funded American Petroleum Institute showed late Tuesday that crude stocks increased by 4.75 million barrels last week.
The report from the Energy Department's Energy Information Administration — the market benchmark — will be out later Wednesday.
"Alongside the continuing cold weather in the U.S., the increase in the (Nymex) price is being explained partly by the expectation that the newly-opened southern section of the Keystone XL pipeline will result in crude oil destocking at Cushing," said analysts at Commerzbank in Frankfurt in a note to clients.
Cushing, Oklahoma, is a major trading hub for U.S. crude and the delivery point for the Nymex contract.
Investors are also cautious before the outcome of the Federal Reserve meeting ending Wednesday. Officials are widely expected to cut the central bank's monthly bond buying that has underpinned an economic recovery.
Oil prices have been underpinned by the Fed's stimulus because it has kept the dollar from strengthening, making oil more affordable for traders using other currencies. The low interest rates created by the bond buying have also attracted investors to commodities like crude oil in search of higher profits.
Brent crude, used to set prices for international varieties of crude, was up 33 cents at $107.74 on the ICE Futures exchange in London.
In other energy futures trading in New York:
— Wholesale gasoline was up 2.13 cents at $2.6589 a gallon.
— Natural gas added 9.9 cents to $5.132 per 1,000 cubic feet.
— Heating oil advanced 2.29 cents to $3.0168 a gallon.