"Markets have become very sensitive to rough weather," said Bart Melek, analyst BMO Capital Markets, pointing to last week's shut-in of oil production ahead of Tropical Depression 10.

The front-month November Brent contract on London's ICE futures exchange was up 103 cents at $78.44 a barrel having earlier climbed to $78.52 a barrel.

The front-month November contract on the New York Mercantile Exchange was trading $1.08 higher at $81.35 a barrel, having early climbed to $81.33 a barrel.

ICE's gasoil contract for October delivery was up $6.50 at $696.00 a metric ton, while Nymex gasoline futures for October delivery were up 106 points at 203.80 cents a gallon.

Tropical Depression 13, about 170 miles east of Tuxpan, Mexico and heading inland, doesn't look to be a problem for oil installations in the southwestern Gulf of Mexico, and state-run Petroleos Mexicanos said Wednesday it isn't taking any preventative action against the storm.

Tropical Storm Karen, east of the Windward Islands, is of no immediate threat and its predicted path will miss oil installations in the northern part of the Gulf of Mexico, according to National Hurricane Center prediction charts.

While these storms don't look likely to impact oil production short term, there is also an area of low pressure across the Florida Peninsula and a tropical wave over portions of Hispaniola and it's the uncertainty over how these will develop that may be bolstering prices further.

"The market, through bitter experience, is taking a cautious approach to any weather disturbances in the Atlantic and that's probably why there's little resistance against the current rally," a broker said.

But while the weather may be responsible for the short-term volatility in the oil market, expectations of a tight supply and demand balance in the fourth quarter of 2007 and during 2008 is the main factor underpinning prices.

Even a relatively bearish set of weekly U.S. inventory data Wednesday, showing an unexpected build in crude inventories, couldn't negate this view

The market, seemingly searching for bullish signs, has ignored the overall stock build and chose instead to focus on the continued slide in inventories at the WTI delivery point of Cushing, Oklahoma. "This explains why Brent has been lagging behind WTI on this morning's rally," the trader said.

Mike Wittner, an analyst at Societe General in London, also pointed to the sharp fall in crude runs. "Utilization rate was 2.7% lower week-on-week, the lowest level at this time of year, partly due to a slow restart in refineries shut during Humberto and to continuing maintenance," he said.

These factors, have helped encourage the funds, who have been booking profits over the previous few sessions, to return to the market as buyers.