Updated from 10:51 a.m. EST

Oil futures were higher Thursday, a day after OPEC agreed to keep pumping at record levels and a reading on U.S. fuel inventories showed a big build in crude.

April crude was recently up 43 cents to $60.45.

On Wednesday, the futures contract lost 2.5% following a U.S. Energy Department report that showed domestic inventories hit a seven-year high of 335.1 million barrels. An increase in petroleum imports and a drop in refinery capacity sent crude stockpiles up 10% over last year. Many refiners are shut down for seasonal maintenance as they switch over to summer blended gasoline.

Even though the Organization of the Petroleum Exporting Countries' decision was widely expected, the energy markets still moved on the news Wednesday. The group of 11-oil producing countries will continue producing oil at 25-year highs to keep markets well supplied. Militant attacks in Nigeria have shaved that country's daily oil production by one fifth to 2.2 million barrels.

The cartel, which pumps 40% of the world's crude, next meets in Caracas, Venezuela, in June to discuss tweaking its production quotas.

"OPEC hawks are still concerned that demand could drop dramatically during the second quarter," wrote Peter Beutel, president of Cameron Hanover, an energy risk management company in New Canaan, Ct. "But with there being a number of threats to supplies, the cartel did not feel it made sense to cut output."

Clashes between rebels and the Nigerian military in the past two days and Iran's referral to the U.N. Security Council over its nuclear ambitions were also keeping crude prices volatile. A wave of violence has cut the country's daily oil production by 20% to 2.2 million barrels. Militants, who are also holding Western oil workers hostage, are demanding a share of the country's petrodollars.

On Wednesday, the International Atomic Energy Agency referred Tehran to the U.N. Security Council over its resumption of small-scale uranium enrichment. The Security Council could impose economic sanctions against OPEC's second-largest producer, which would crimp world oil supplies and drive up prices. Such a move, though, is seen as highly unlikely.

Unleaded gasoline was rising 2 cents to $1.67 a gallon as the weather and spring driving season started. Although gasoline prices typically start climbing in March when people start taking weekend trips and long vacations, they're expected to be higher than last year. The Energy Department is forecasting gasoline will cost an average $2.50 a gallon this summer, an increase of 17 cents from current prices.

A switch to ethanol-based gasoline will also help keep gasoline prices high. The EPA has mandated refineries phase out MTBE by this June because the fuel additive has polluted rivers, lakes and aquifers nationwide. The switch may prompt temporary shortages and price spikes because there may not be enough gasoline without MTBE on the market.

Gasoline prices were also gaining ground on lower fuel stockpiles, which fell 1.1 million barrels last week to 224.8 million barrels. Higher demand and fewer refineries producing gasoline from crude were the culprits behind the drop. Still, supplies are about the same as last year.

Heating oil was picking up 1 cent to $1.70 a gallon a day after stockpiles of distillates dropped 2.7 million barrels to 131.4 million barrels. Warmer weather has kept supplies 14% above last year. Distillates include heating oil.

Warmer weather will likely keep heating oil and natural gas prices low. Temperatures are expected to climb into the upper 50s and 60s later this weekend in the Northeast, the largest user of heating fuels, according to AccuWeather.com, a State College, Pa.-weather forecaster.

Rising temperatures and large fuel surpluses were pushing natural gas prices down 12 cents to $6.53 per million British thermal units. Inventories fell 85 billion cubic feet to 1.8 trillion cubic feet, the Energy Department reported Thursday. There is 22% more natural gas in storage now than the same period last year, and 54% more than the five-year average.

Analysts polled by Bloomberg had expected a drop of 103 billion cubic feet. The five-year average is 108 billion cubic feet.

"This week essentially marks the death knell for winter," said Rakesh Shankar, an energy analyst at Economy.com in West Chester, Pa.