Brett Philbin 
 
Oil futures settled higher after fluctuating between gains and losses Thursday, as weaker-than-expected U.S. economic data ran up against the Federal Reserve's move to begin winding down its bond-buying program.

Light, sweet crude for January delivery, which expires at settlement, rose 97 cents, or 1%, to $98.77 a barrel on the New York Mercantile Exchange.

Brent crude for February delivery on ICE Futures rose 66 cents, or 0.6%, to $110.29 a barrel.

The U.S. contract, known as West Texas Intermediate, or WTI, posted gains in 10 of the previous 14 sessions, including Wednesday, when the U.S. central bank said it would pare back its signature economic stimulus program by $10 billion a month. While market participants were concerned such a decision could weigh on crude prices, it was widely interpreted as a sign that modest economic growth could continue, and, thus, lift crude demand in the world's largest oil consumer.

On Thursday, though, some of those hopes faded as the Labor Department reported that the number of people filing for initial unemployment benefits rose for the second consecutive week, to a seasonally adjusted 379,000 in the week that ended Dec. 14. The initial claims for jobless benefits climbed to their highest level since March and were well above the 345,000 new claims that economists had predicted.

While claims figures can be volatile during the holiday season, the figure didn't necessarily bolster the case for an economic recovery, just a day after the Fed suggested that the U.S. economy needed less help.

"You're looking for that [jobless claims] number to slide...it's an demand indicator," said Robert Yawger, director of energy futures at Mizuho Securities USA.

He added that WTI has been "trapped" in a narrow range for nearly two weeks and many investors are unlikely to place big bets moves on expiration day in the absence of a major catalyst.

Traders were also less enthusiastic about the U.S. supply picture despite the Energy Information Administration reporting a third straight week of declining inventories. On Wednesday, the EIA said crude stockpiles fell, by 2.9 million barrels last week, a figure that surpassed analysts' estimates. However, total crude stocks still stand at their highest amount for this time of year since the EIA began tracking the data in 1982.

Front-month January reformulated gasoline blendstock, or RBOB, gained 4.28 cents, or 1.6%, to $2.7401 a gallon. January heating oil added 2.05 cents, or 0.7%, to $3.0306 a gallon.

Write to Brett Philbin at brett.philbin@wsj.com

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