Oil prices pared gains after an Energy Department report showed that U.S. inventories climbed and gasoline demand tumbled to the lowest level in a decade.

Futures dropped as much as 0.4 percent as supplies climbed 4.18 million barrels to 338.9 million last week, the report showed. A 2.6 million-barrel gain was forecast, according to analysts surveyed by Bloomberg News. Gasoline stockpiles rose 3.02 million barrels to 230.1 million. Demand for the fuel dropped to 7.97 million barrels a day.

Crude oil for March delivery fell to $98.12 a barrel on the New York Mercantile Exchange. The contract traded at $99.49 before release of the inventory report at 10:30 a.m. in Washington.

Brent crude oil for March settlement climbed $1.23, or 1.1 percent, to $112.21 a barrel on the London-based ICE Futures Europe exchange.