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 Prices were still not far from Tuesday's record close of $100.88 a barrel as the U.S. dollar traded at fresh lows against the euro. Worries about the American economy is driving more money into energy futures as a hedge against inflation.
The report by the U.S. Energy Department's Energy Information Administration showed that country's crude oil inventories rose by 3.2 million barrels, or 1 percent, to 308.5 million barrels.
Although that number is slightly lower than levels a year ago, it is well ahead of the 2.4 million barrel gain analysts had been expecting, according to a survey by Dow Jones Newswires. It was the seventh straight week the report showed a rise in crude inventories, suggesting the U.S. at least has more than enough oil to meet demand.
Light, sweet crude for April delivery lost 39 cents to $99.25 a barrel in electronic trading on the New York Mercantile Exchange, midday in Europe.
The contract fell $1.24 to settle at $99.64 a barrel Wednesday after surging as high as $102.08 a barrel, a trading record. On Tuesday, the contract jumped $1.65 to settle at a record $100.88 a barrel.
In London, Brent crude fell 7 cents to $98.20 a barrel on the ICE Futures exchange.
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 The EIA data showed gasoline inventories also jumped more than expected
-- by 2.3 million barrels to 232.6 million barrels; analysts had expected a more modest rise of 400,000 barrels. Refinery activity also increased much more than expected.
The weakening U.S. dollar also helped prop up prices. The 15-nation euro jumped to a record $1.51 against the greenback, meaning that crude remains a relative bargain for buyers overseas. Gold
-- another commodity seen as a hedge against inflation -- also struck a record Wednesday.
In his testimony to the U.S. Congress Wednesday, Federal Reserve Chairman Ben Bernanke warned of sluggish business growth ahead, and signaled a willingness by the central bank to cut interest rates again. But Bernanke also noted that the Fed must keep a close watch on inflation given the sharp rise in energy prices and other costs.
Heating oil futures lost 1.16 cents to $2.7595 a gallon (3.8 liters) while gasoline futures dropped 1.32 cents to $2.4645 a gallon.
Natural gas futures rose 4.5 cents to $9.105 per 1,000 cubic feet.
[Associated Press; By PABLO GORONDI]
Associated Press writer Gillian Wong in Singapore contributed to this report.
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