New York's main contract for January delivery gained 24 cents to $96.41 per barrel while Brent North Sea crude for delivery in January advanced 60 cents to $107.62.
The oil market was buoyed by the weekly US inventory report, which showed a larger-than-expected drawdown last week, said Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore.
"The US inventories report shows declining crude oil stocks and that has supported oil," he told AFP.
The stockpile slump was larger than forecasts by the American Petroleum Institute of a 5.6 million barrel cut, indicating that demand in the world's largest oil consumer was holding despite its economic woes.
Traders were also looking to the crude market as an alternative to equities on fears of exacerbating losses already incurred due to the eurozone debt crisis, Shum said.
"When we look across markets, equities are down and investors remain bullish on oil because oil is still expected to do well. It's a relatively tight market," he stated.
Oil prices had been mixed in early trade after European economic giant Germany saw poor bond sales and China's manufacturing data sank to a 32-month low.
Investors on Wednesday shunned an issue of German 10-year bonds, considered the gold standard of eurozone debt, making bids of only 3.9 billion euros ($5.2 billion) for the 6.0 billion euros on offer.
