WASHINGTON ( TheStreet) -- Crude prices strengthened Wednesday despite a higher-than-expected increase in crude oil inventories and a single-notch
downgrade to Spain's credit rating . Crude inventories rose by 1.9 million barrels for the week ending April 23, the Energy Information Administration said Wednesday, which was just past forecasts calling for a 1.4 million barrel build, according to Platts. Still, the figure came up well short of numbers provided by the American Petroleum Institute late Tuesday estimating a rise of 5.34 million barrels. The June crude oil contract whipsawed in both positive and negative territory in the aftermath before settling 78 cents higher, or up by nearly 1%, at $83.22 a barrel. The contract fell as low as $81.29 a barrel and rose to a session high of $82.97. Market reaction to Spain's credit rating cut by Standard & Poor's was muted compared to the previous session, when credit rating downgrades to Greece and Portugal ignited contagion fears and triggered a steep selloff. The Federal Open Market Committee's slightly more upbeat assessment of economic conditions, its decision to keep the key interest rate unchanged and its continued intention to keep rates low "for an extended period" helped bolster market sentiment, as did another round of robust earnings reports. A strengthening dollar and weakening euro put some pressure on crude earlier, but the dollar index was last down by nearly 0.2%. In a bit of a surprise, the EIA said distillate fuel inventories swelled more than expected, rising by 2.9 million barrels and outpacing analysts' calls for a 1.2 million barrel build. On the other hand, gasoline stocks fell by 1.2 million barrels. Wall Street had been looking for those inventories to climb up by 500,000 barrels. "On the demand side, gasoline demand is still running at the highest level for any April, ahead of the previous peak in April 2007. The current year-over-year growth in gasoline demand is 300,000 barrels a day, or 3.4%," said Barclays Capital analyst Paul Horsnell in a weekly oil data review. "Distillate demand does at least show a year-over-year gain for April-to-date of 93,000 barrels a day, or 2.7%. However, while gasoline demand is at an all-time April high, distillate demand is still 661,000 barrels a day, or 15.7% below its April 2007 level." The June heating oil contract settled marginally lower, down by 0.04%, to finish at $2.25 a gallon, while the gasoline contract for June delivery saw marginal gains, rising 0.2%, to settle at $2.33 a gallon. In equities, the day yielded a few major oil-related earnings releases. Hess ( HES) beat bottom-line estimates, joining Royal Dutch Shell ( RDS.A), which reported the same. After both firms reported a step-up in production during the first quarter, shares finished the session higher by 0.5% and 2.5%, respectively. The NYSE Arca Oil index rose 0.9%, while the Philadelphia Oil Service Sector index gained 1.1%. Exxon Mobil ( XOM), which upped its quarterly dividend by 2 cents to 44 cents a share, was the Dow's fourth-best performing stock on Wednesday, a day ahead of its first-quarter earnings report. Analysts are projecting a profit of $.41 cents a share. Exxon's stock closed 1.4% higher at $69.19. Fellow Dow component Chevron ( CVX) finished 0.5% higher at $80.62. Chevron releases its first-quarter earnings report on Friday. Analysts are looking for a profit of $1.94 a share. On Thursday morning, the EIA will release its weekly natural gas storage report. Analysts polled by Platts are expecting an increase in the range of 72 to 76 billion cubic feet in the week ended April 23. The June natural gas contract gained 3 cents, or 0.8%, to settle at $4.35 per million British thermal units. -- Written by Sung Moss and Melinda Peer in New York.