08/30/2012 08:59 EDT | Updated 10/30/2012 05:12 EDT

Oil prices hover above US$95 in Europe as weather fears ease, US supplies increase

The price of oil hovered above US$95 a barrel on Thursday after a powerful storm that had shut down refineries along the U.S. Gulf Coast started to ease as it moved inland.

By early afternoon in Europe, benchmark West Texas Intermediate crude for October delivery was down two cents to US$95.47 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 84 cents to finish at US$95.49 a barrel on Wednesday.

In London, Brent crude rose 75 cents to US$113.29 on the ICE Futures exchange.

Traders were watching for any reports of significant damage from hurricane Isaac as it passed over oil facilities in the Gulf of Mexico. The storm's heavy winds and rain were not expected to cause extensive damage to oil production and refinery operations.

"Although a lot of the production capacity was closed down, it was a precautionary measure and we're not hearing any reports of significant damage," said Nick Trevethan, senior commodities strategist at ANZ Research in Singapore. "There have been some power outages that may interfere with the restart of some onshore facilities."

Trading volumes were low as markets awaited U.S. Federal Reserve chief Ben Bernanke's highly anticipated speech on Friday at an economic conference in Jackson Hole, Wyo.

Market watchers are hoping for signs that the Fed is willing to take action to spur growth in the U.S.

They are also anticipating the release of manufacturing data out of China. Worse-than-expected numbers could put pressure on Beijing for more stimulus measures to help revive growth in the world's No. 2 economy.

Meanwhile, an unexpected rise in U.S. crude stockpiles was helping to keep a ceiling on oil prices.

"The U.S. inventory data presented (Wednesday) afternoon by the U.S. Department of Energy additionally weighed on prices," said analysts at Commerzbank in Frankfurt. "Last week, crude oil stocks rose sharply by 3.8 million barrels, putting them 7.5 per cent higher than the five-year average and at their highest level for this time of year since 1990."

In other Nymex energy trading, heating oil advanced 2.2 cents to US$3.1444 a U.S. gallon (3.79 litres) while wholesale gasoline rose 1.09 cents to US$2.9277 a gallon. Natural gas slipped 2.4 cents to US$2.661 per 1,000 cubic feet.