The price of oil rose above $95 a barrel on Wednesday amid expectations for solid demand and weaker supply, particularly in Asia and Europe.
By early afternoon in Europe, benchmark U.S. crude for March delivery was up 53 cents at $95.50 a barrel in electronic trading on the New York Mercantile Exchange. On Tuesday, the Nymex March contract closed at $94.97 a barrel, up 38 cents.
The IMF said Tuesday it expects the world economy to grow 3.7 per cent this year and the U.S. economy by 2.8 per cent. Both are slightly higher than its previous projections.
Underpinning expectations of increased demand for crude is the recent decision by the International Energy Agency to raise its demand forecast for 2014 by 90,000 barrels a day.
The IEA report also indicated some changes on the supply side, its data showing larger declines than previously expected.
"There are shortages in Asia and Europe, and the previously large surplus in America has been significantly reduced," said analysts at Commerzbank in Frankfurt in a note to clients. "According to these figures, the oil market is therefore tighter than previously assumed, meaning that a return of Libya and Iran to the oil market would pose less of a problem."
Investors will also be monitoring fresh information on U.S. stockpiles of crude and refined products.
Data for the week ending Jan. 17 is expected to show a draw of 1.9 million barrels in crude oil stocks and a build of 1.7 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The American Petroleum Institute will release its report on oil stocks later Wednesday , while the report from the Energy Department's Energy Information Administration — the market benchmark — will be out on Wednesday. The releases have been delayed one day because of Monday's Martin Luther King Jr. holiday.
Brent crude, used to set prices for international varieties of crude, was up 64 cents to $107.37 on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline added 0.89 cent to $2.6423 a gallon.
— Natural gas jumped 9.2 cents to $4.523 per 1,000 cubic feet.
— Heating oil gained 1.58 cents to $2.9669 a gallon.