Light, sweet crude for March delivery rose US$1.04 to US$88.03 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.

The contract fell US$2.22 to settle at US$86.99 a barrel on Wednesday.

In London, March Brent crude futures rose US$1.05 to US$87.67 a barrel on the ICE Futures exchange.

Oil rose to a record US$100.09 a barrel earlier this month before falling back on economic concerns.

Heating oil futures added 2.79 cents to US$2.4510 a gallon (3.8 liters) while gasoline prices rose 1.22 cents to US$2.2630 a gallon. Natural gas futures rose 7.9 cents to US$7.70 per 1,000 cubic feet.

Traders were awaiting the release later Thursday of this week’s U.S. inventory report by the Energy Department’s Energy Information Administration.

The report was expected to show U.S. oil inventories grew last week 1.8 million barrels, according to the average estimate of analysts surveyed by Dow Jones Newswires.

Gasoline inventories on average were forecast to have gained 1.6 million barrels in the week ended Jan. 18, while distillates were expected to have grown 100,000 barrels.

Thursday’s rise in many Asian and European stock indices was also seen supporting oil prices. At midday in Europe, London’s FTSE 100 Index was up nearly 4 percent, while Frankfurt’s DAX was 5.5 percent above Wednesday’s close. The CAC-40 in Paris was 5.1 percent higher.

Global stock markets have been turbulent in recent days on fears that the U.S. economy is close to entering a recession, if it hasn’t already. Energy investors, who often view stocks as a proxy for economic growth, fear a slowdown would curtail demand for oil and petroleum products such as gasoline and heating oil.

“With the release of the DOE statistics, it will be the first time in more then a week that oil traders will have the chance to focus on something else than the Dow,” said Petromatrix analyst Olivier Jakob in Switzerland.

The U.S. Federal Reserve’s decision Tuesday to slash its benchmark fed funds rates by three-quarters of a percentage point to 3.5 percent has done little to limit declines in oil prices. While the Fed is widely expected to cut rates further next week, many investors remain worried about whether the cuts will stave off recession.

Investors are also concerned that high energy prices may be contributing to the economic slowdown.

The benchmark U.S. oil contract, WTI, was still in a “strongly defined negative momentum and has not been able yet to confirm any attempts at rebounds,” Jakob said in a market report.

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