Crude for September delivery was up 94 cents at $77.25 a barrel. Gasoline futures turned higher, up 0.17 cent at $2.228 a gallon.

Gasoline supplies fell by 3.2 million barrels in the week ended Aug. 4, the Department of Energy reported. It was the third straight weekly decline, and was much larger than the estimated range of a drop between 400,000 and 850,000 barrels.

"The villain once again is strong apparent demand for gasoline," said Rakesh Shankar, economist at Moody's Economy.com. "This remains as puzzling as ever, given the recent uptick in gasoline prices. Gasoline demand apparently rose 1.8% for the week ending August 4." Shankar said recent reports, including monthly real consumer spending data, have been showing a sharp and steady decline in consumer spending on gasoline.

Shankar notes that BP's shutdown will not register in the inventories data until next week's release. "Expect further drawdowns in crude inventories and stronger imports as a result, although some near-term disruptions are likely," he said.

He added that the modest reaction in the price of gasoline futures is typical as traders take time to digest all the numbers contained in the supply report.