A report that showed the U.S. economy unexpectedly contracted in the fourth quarter cut short oil's first foray above $98 a barrel in four months on Wednesday.

Benchmark oil for March delivery was little changed in afternoon trading, down 8 cents to $97.50 per barrel on the New York Mercantile Exchange. It rose as high as $98.24 in the morning but fell back after the government said the U.S. economy shrank from October through December, the first quarterly drop since 2009.

The government also said that crude oil supplies rose by 5.9 million barrels last week, more than twice what analysts expected, as imports increased. The rise in inventories could also indicate less demand. Still, oil maintained some of the momentum that has pushed up the price by about $6 a barrel this year.

The Federal Reserve concludes a two-day meeting later Wednesday. Investors will study the Fed's statement for clues about the outlook for the economy and interest rates.

At the pump, the national average for a gallon of gas jumped 3 cents overnight to reach $3.39 for the first time since Dec. 1.

Brent crude, used to price international varieties of oil, gained 37 cents to $114.73 a barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

  • Wholesale gasoline rose 6 cents to $3.03 per gallon.
  • Natural gas rose 6 cents to $3.32 per 1,000 cubic feet.
  • Heating oil was up 5 cents at $3.11 a gallon.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.