Brent crude rose $1.08 to settle at $112.66 a barrel, off an all-time peak of $112.79 hit earlier. US crude stocks fell 2.3 million barrels in the week to April 11, countering analyst forecasts for a build, while gasoline stocks showed a draw of over 5 million barrels, the US Energy Information Administration reported.
The draws came as refiners cut runs to 81.4 percent of capacity - the lowest level since October 2005 after hurricanes flooded Gulf Coast plants - as high crude prices cut into profit margins. "The refinery utilisation number is exactly where refiners want it to be - poor gasoline economics has prompted refineries to go slow on production. They are also looking at product demand numbers, which are not strong," said Tim Evans, energy analyst at Citigroup Futures Research.
US gasoline demand has been hit by surging fuel costs and analysts are forecasting record pump prices for US motorists taking to the roads for vacation this summer. Heating oil stocks rose by 100,000 barrels last week, according to the EIA, as warmer weather hit much of the United States, prompting a bout of profit-taking in early afternoon activity.
The slumping US dollar, which plumbed new lows against the euro on Wednesday, has also supported oil's record rally by boosting non-US spending power and attracting investors seeking an inflation hedge. "The dominant factor continues to be the US dollar and I expect this to continue for a while," said Gerard Rigby, an analyst at Sydney-based Fuel First Consulting.