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NEW YORK - The price of oil bounced back near US$115 a barrel on Wednesday, as traders shrugged off a massive increase in U.S. crude inventories and a stronger U.S. dollar and focused on possible supply threats. It was a volatile day for energy prices, which initially retreated after the U.S. Energy Department said a big gain in imports drove crude inventories up by a hefty 9.4 million barrels in the week ended Aug. 15. The figure came in much higher than the average analyst forecast for a 1.7 million-barrel increase, according to energy information provider Platts.

But not all U.S. fuel supplies were abundant. Gasoline inventories shrank by a larger-than-expected 6.2 million barrels to below-average levels, the EIA said, while distillate inventories -- which include heating oil and diesel fuel -- rose by less than expected. Gasoline and heating oil prices, like crude, ended the session higher. Given that the hurricane season is not even halfway over, traders remain nervous about the possibility of storms striking oil facilities in the Gulf of Mexico. Doubt over Russia's adherence to a ceasefire with Georgia, where a key oil pipeline is located, and escalating tension between Russia and the United States was also keeping a floor under prices.

Light, sweet crude for September delivery rose 45 cents to $114.98 a barrel on the New York Mercantile Exchange, after rising as high as $117.03 before the inventory data was released, falling as low as $112.61, and then rebounding again. The September contract expired on Wednesday; the October contract finished up $1.01 at $115.56 a barrel.

The fact that oil prices lifted in the face of a large rise in crude inventories and another rebound in the U.S. dollar was significant, said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.