Oil Prices Steady Above $97 a Barrel

The rise at Cushing, Okla., the physical delivery point for oil contracts bought on the New York Mercantile Exchange, offset the impact from an unexpected drop in the overall stockpiles. Falling supplies at the terminal are seen as a symptom of a tight market, and the gain in Cushing eased those concerns.

Caution ahead of a holiday break also may have taken some of the heat out of prices.

"Partly the reason we saw oil prices a little softer last night was that people were maybe reluctant to take a long position ahead of the Thanksgiving holiday," said David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney. Long positions are bets that prices will rise.

Light, sweet crude for January delivery rose 17 cents to $97.46 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore.

New York floor trading will be closed Thursday for Thanksgiving Day and will close early Friday. Electronic trading will not be affected.

On Wednesday, the contract fell 74 cents to settle at $97.29 a barrel during the New York floor session, retreating from an intraday record of $99.29 a barrel touched during electronic trading earlier in the day.

A swoon in global stock markets also depressed oil prices Wednesday. Energy investors worry that falling equities are a symptom of weakening economies that would use less oil and gasoline.

Singapore Prime Minister Lee Hsien Loong said late Wednesday that the record high oil prices are a burden on Asian nations.

"For those of us who are not oil exporters, and we import all our oil, this is a burden which is growing," he said. "It is particularly a burden on the low-income groups, and it's also a factor in increasing the inflation rate and the cost of living for consumers in their countries."

Lee also quoted the leader of India, which subsidizes fuel, as telling other Asian heads of state during meetings in Singapore that the cost of energy is of greater concern to him than the effects of climate change.

Oil inventories fell 1.1 million barrels last week, according to the Energy Department's Energy Information Agency. Analysts surveyed by Dow Jones Newswires had forecast, on average, an increase of 700,000 barrels. Cushing inventories, though, rose 1.2 million barrels, their first substantial increase in weeks, and the largest since the end of August.

"I wouldn't be surprised if we saw (oil prices) creep higher in the near term, just as people have another look over the U.S. EIA data and think about how tight the oil market is," said Moore.

The EIA reported that U.S. refinery activity fell last week, countering expectations for a slight increase. Gasoline inventories grew less than expected, but distillate supplies fell by 2.4 million barrels, far more than expected.

The decline in overall crude supplies can be explained in part by imports, which fell by an average of 667,000 barrels a day, or about 6 percent, last week. Gasoline imports rose 11 percent.

January Brent crude rose 38 cents to $95.22 a barrel on the ICE Futures exchange in London.

Heating oil futures rose 0.81 cent to $2.7058 a gallon while gasoline prices added 0.74 cent to $2.4445 a gallon. December natural gas futures were flat at $7.55 per 1,000 cubic feet.