Stronger U.S. economic data and a report of falling crude inventories also gave prices a lift.
The benchmark crude for February delivery was up 93 cents to $101.52 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 12 cents to end at $100.59 on Wednesday.
"Trading has been choppy but the market recovered on news that the IMF will boost its lending capacity for Europe," said Natalie Robertson, commodities analyst with ANZ Banking Group in Melbourne.
The International Monetary Fund estimated countries around the world would need about US$1 trillion in loans over the coming years and said it aimed to increase its financial firepower by around $500 billion so it can give out new loans.
The IMF has put up about a third of the financing for Europe's bailouts over the past two years, but there are growing worries that non-European countries will also need more help given the worsening economic outlook.
ANZ's Robertson said prices were also supported by the American Petroleum Institute's report Wednesday showing an unexpected drop in crude inventory last week.
U.S. crude stockpiles fell by a surprising 4.8 million barrels last week, according to the API, while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had forecast a build of 2.6 million barrels.
The inventory report from the Energy Department's Energy Information Administration — the market benchmark — will be out Thursday.
Strong U.S. housing figures, an improvement in U.S. manufacturing activity in December and increased orders and production also buoyed crude prices, she said.
Bank of America Merrill Lynch predicted limited upside, with crude prices to average $101 a barrel this year. it cited weak oil global demand after the International Energy Agency cut its forecast for oil demand growth to 1.1 million barrels a day, down from an earlier estimate of 1.3 million barrels a day.
The World Bank also cut its forecast for global economic growth this year and next, citing the effects of the European debt crisis and weaker prospects for several leading developing countries, especially Brazil and India.
Global growth is now projected at 2.5 per cent in 2012 and 3.1 per cent in 2013.