Crude oil futures on Wednesday hit the highest gain in about 11 months pushing oil prices high.
Oil decline had started on worries that a weakening U.S. economy would affect fuel demand although latest U.S. petroleum data revealed declines in stockpiles of distillates like heating oil and diesel revealing steady oil consumption.
Light sweet crude for January, on the New York Mercantile Exchange increased 4.9% to $94.39 a barrel, and Brent crude on the ICE exchange settled 4.5% higher at $94.02 a barrel.
Goldman Sachs gave futures a head start when the investment bank, whose oil predictions are widely watched, raised its forecast for the average oil price and said it expected prices to hit $105 a barrel by the end of next year.
When you put a couple of things together and get a little momentum in the market, that's a recipe for the $4-plus rally we saw today, said Peter Donovan, a vice president of Vantage Trading on the Nymex floor.
The Federal Reserve's announcement to coordinate actions with other central banks to fight off the credit crunch that has been squeezing financial markets boosted fuel since it would support continued energy demand.