London Brent crude rose 31 cents higher at $57.95. US government data released on Thursday showed distillate stocks fell 900,000 barrels last week due to rising demand, the Energy Administration Information said. Analysts had expected a decline of 700,000 barrels.
US distillate consumption last week rose 5.2 percent from a year ago, while product demand gained 2 percent, the EIA said.
"The market has been strong over the last two days, it seems likely to continue to stay strong on gasoline," said Tom Bentz, analyst with BNP Paribas Commodity Futures.
However, a surprise rise in US crude stocks and milder weather in the United States offset the recovery in distillate demand.
US crude inventories rose 100,000 barrels last week due to a rise in imports, confounding forecasts for a fall of 800,000 barrels.
"The surprise of course is the build in crude oil which gives this report a bearish tilt," said Phil Flynn, analyst at Alaron Trading.
Temperatures in the US Northeast, home to the world's largest heating oil market, were expected to be above normal for the next 10 days, weather analysts said.
Overall US heating fuel demand was forecast to be about 28 percent below normal in the week to December 31, with heating oil demand in the Northeast region about a quarter less than usual, the US National Weather Service said.