NEW YORK (AP) -- The price of oil was down slightly Wednesday as traders waited to hear the latest on the Federal Reserve's monetary policy from chairman Ben Bernanke.
Oil fell about 40 cents after the government said U.S. oil supplies rose by 300,000 barrels last week. But it quickly bounced back. Benchmark oil for July delivery was down 12 cents to $98.32 a barrel on the New York Mercantile Exchange in midday trading.
The nation's inventory of crude oil grew by 300,000 barrels, or 0.1 percent. At 394.1 million barrels, supplies are 1.8 percent above year-ago levels, the Energy Department's Energy Information Administration said in its weekly report. Analysts expected supplies to drop by 1 million barrels.
In Washington, the Fed will issue its latest policy statement at 2 p.m. EDT. Bernanke will hold a news conference a half-hour later.
To help support the U.S. economic recovery, the Fed has been buying $85 billion in bonds every month in an attempt to keep long-term interest rates low and encourage lending. The new money generated has flowed into the financial system, helping many assets, including oil, to climb from the lows witnessed during the global recession following the 2008-2009 financial crisis.
Investors want to hear more from Bernanke on the Fed's plans for the bond-buying program. Markets have been volatile during the past few weeks because of uncertainty over the Fed's intentions.
"Our best guess is that the Fed will wait until the September meeting and even then the tapering will begin with a very modest reduction in the monthly purchases," to perhaps $65 billion per month, Capital Economics analysts said in a research note.
Brent crude, a benchmark for many international oil varieties, was up 11 cents to $106.13 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex:
— Wholesale gasoline was unchanged at $2.88 a gallon.
— Heating oil was unchanged at $2.96 per gallon.
— Natural gas gained 5 cents to $3.96 per 1,000 cubic feet.
Pablo Gorondi in Budapest and Pamela Sampson in Bangkok contributed to this report.