Oil rose towards $125 this morning recovering on a weakening US dollar after Iran's assurances that it would not cut crude exports pushed prices down a day earlier.
US light crude for June delivery was up 46 cents a barrel at $124.68 by 8.10am, off an earlier low of $123.54 after having settled down $1.58 at $124.22.
London Brent crude whose front month June contract expires by the end of today, was up 74 cents at $122.60.
Weekly US inventory data showed a larger-than-expected 1.4 million barrels rise in distillates stocks - that include heating oil and diesel fuel - easing concerns about a tightening distillates market that has sent heating oil futures to record highs this week.
US crude stocks rose by only 200,000 barrels as imports dropped and refiners boosted utilization rates, while gasoline inventories, which are expected to take center stage soon with the start of the US driving season by the end of the May, fell
by 1.7 million barrels.
Also helping to cap prices, a senior Iranian official said yesterday Iran had no plans to cut exports to world markets.