Crude gained near $1 on Thursday after a rally in European, Asian and U.S. stock markets.
Today the U.S. Energy Department released data of inventories stating oil supplies rose 2.3 million barrels to 289.4 million in the week ended last Friday.
Crude Oil rose $2.01, or 2.31 percent a barrel on the New York Mercantile Exchange at 1:54 p.m. Brent crude increased $2.66, or 3.07 percent to $89.33 a barrel on London's ICE Futures Exchange.
The official report showed oil supplies had their biggest gain since December 2006. Forecasts from analysts expected an increase of 2.1 million barrels of crude inventories, according to a Dow Jones Newswire survey.
In addition, Energy Department disclosed data that gasoline inventories increased 5.1 million barrels and distillates slid 1.3 million barrels.
Oil's price was supported by a weak dollar. The U.S. dollar lost against British pound, Canadian and Australian currencies due to speculation the Federal Reserve will lower interest rates next week after the 0.75 percent cut made Tuesday.
The Federal Reserve will hold its meeting on January 29 and 30.