Oil rises on signs US economy still needs stimulus

By early afternoon in New York, benchmark oil for July delivery was up 46 cents to $93.59 a barrel. That marked a reversal of Wednesday's sentiment, when oil fell $1.88 on concerns the Fed would taper it stimulus program.

The government said the economy grew at 2.4 percent in the first quarter, slightly slower than initially estimated. Also, the number of Americans seeking unemployment aid rose last week, a sign layoffs have increased.

The Fed has been buying $85 billion of bonds each month in an effort to keep interest rates low and encourage borrowing, lending and investing. That environment has helped make oil a more attractive investment than low-yielding options such as bonds.

Meanwhile, the U.S. Energy Department's Energy Information Administration said the nation's supply of oil rose last week by 3 million barrels to 397.6 million barrels, the highest level since the government started collecting the data in 1978. But gasoline supplies fell by 1.5 million barrels just ahead of the Memorial Day weekend. That was twice the drop analysts expected and indicated that demand picked up for what's considered the start of peak driving season.

On Friday, ministers from the Organization of the Petroleum Exporting Countries will meet in Vienna to discuss, among other things, production levels. But more complex issues also face OPEC, including the rise of shale oil production in the U.S. The Paris-based International Energy Agency says total production could top 9 million barrels a day by 2018, which would mean near self-sufficiency for the U.S. as well as significantly less dependence on OPEC imports.

Brent crude, a benchmark for many international oil varieties, was up 14 cents to $102.57 a barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

— Wholesale gasoline rose 1 cents to $2.81 a gallon.

— Heating oil fell 1 cent to $2.86 per gallon.

— Natural gas shed 13 cents to $4.05 per 1,000 cubic feet.