On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at USD96.92 a barrel on Wednesday, up 0.08%, off from a session high of USD96.98 and up from an earlier session low of USD96.82.
Der Spiegel reported over the weekend that the European Central Bank may decide to cap yields in eurozone sovereign debt markets at its September policy meeting.
The ECB would carry out such a policy via buying sovereign bonds in the open market, though bank officials branded the news report as misleading, which sent crude falling earlier this week on fears inaction may exacerbate the debt crisis, hurt the European economy and crimp demand for oil and fuels.
However, The Daily Telegraph later said the report was true, which sent oil rebounding before Japanese trade data capped gains.
Japan reported that exports dropped 8.1% in July, though imports rose 2.1%, fueling fears that overseas demand for Japanese products and services could be waning.
Elsewhere, Luxemburg’s Prime Minister Jean-Claude Juncker, also head of a group of eurozone finance ministers, was set to meet with Greek Prime Minister Antonis Samaras later to discuss a two-year extension Greece's reform programs.
German Chancellor Angela Merkel is scheduled to meet with French President Francois Hollande on Thursday to discuss ways to firewall and extinguish the crisis, while Greek Prime Minister Antonis Samaras will meet the French and German leaders later in the week, fueling hopes EU policymakers will work to keep Greece in the eurozone, which could maintain energy demand.
Meanwhile, crude inventories in the U.S. dropped 6.04 million barrels last week, according to data from the American Petroleum Institute, compared to a gain of 2.78 million barrels during the week prior.
Analysts had expected crude stocks to rise by 50,000 barrels last month.
Ongoing tensions in the Middle East supported prices also, as a standoff between the Israel and its western allies and Iran have stoked fears that conflict could erupt and disrupt supply.
On the ICE Futures Exchange, Brent oil futures for October delivery were up 0.40% and trading at USD114.86 a barrel, up USD18.01 from its U.S. counterpart.
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