Brent crude oil increased towards $105 a barrel on Wednesday following a large decline in US crude stocks last week.
Reuters reported that Brent crude oil was up 17 cents to $104.78 a barrel, while US crude for September delivery increased 16 cents to $97.54 a barrel.
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Oil prices have fallen more than $10 a barrel in the past six weeks, following a supply glut in West African and Atlantic markets.
Demand in the US remains strong as data from the American Petroleum Institute (API) revealed that crude inventories declined by 5.5 million barrels to 363.9 million barrels in the week ending 1 August.
US Government data from the Energy Information Administration (EIA) is scheduled for release later today.
Investors will watch stocks at the delivery hub in Cushing, Oklahoma, which have declined close to minimum operating capacity.
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By GlobalDataMeanwhile, senior officials in Iran are working with factions within Iraq to find an alternative leader to Prime Minister Nuri al-Maliki to fight a Sunni Islamist insurgency.
Moscow agreed to help Tehran to sell its crude but has since withdrawn its statement.
