NEW YORK (CNN/Money) - Oil turned higher Wednesday on reports of refinery snags and news that the top Republican in Congress said he was hesitant to lift import tariffs on ethanol.

Prices had fallen earlier in the session after the government reported a surprise rise in inventories last week, but the sell-off proved short-lived.

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Light, sweet crude for June delivery settled up $1.44 at $72.13 after falling as low as $69.65 earlier in the session. Just before the Energy Information Administration (EIA) released its report, the contract was down 14 cents at $70.55.

Speaker of the House Dennis Hastert said Wednesday that he did not think that lifting an ethanol tariff would benefit the United States, Reuters reported.

"I think that sent a little rumbling through he air," said Jim Quinn, an A.G. Edwards floor analyst at the New York Mercantile Exchange, regarding Hastert's reported comments.

Reuters also reported that some refinery snags were driving crude higher despite the weekly report showing a surprising jump in crude, gasoline and distillate stocks. Distillates are used to make diesel and heating fuel.

The EIA reported that crude supplies climbed by 300,000 barrels from last week, putting U.S. crude oil inventories at their highest level since May 1998. A survey by Reuters had anticipated a decline of 600,000 barrels.

"Even though there's ample supply on hand, clearly people don't think it [the price] is going to drop," said Mike Fitzpatrick, an energy analyst at Fimat in New York.

Gasoline stocks rose 2.4 million barrels last week, about double forecasts, according to a Reuters survey. Distillate stocks climbed 200,000 barrels last week

Gasoline supplies and refining capacity have been closely watched over the last few months as a switch in blends right before the summer driving season has caused fear of a shortage and helped lift prices.

The average nationwide price for regular unleaded gasoline rose more than a penny Wednesday to $2.89 a gallon, according to AAA.

Oil prices have remained near record highs partly due to supply concerns, including Iran's dispute with the West over its nuclear ambitions. Investors have feared that the world's fifth-largest oil producer could cut off oil heading to the marketplace if the confrontation escalates.

CNN reported earlier Wednesday that an executive for the Houston-based oil company Baker Hughes (Research) was shot and killed in the Nigerian city of Port Harcourt. The company official was unable to say whether if the crime was part of recent attacks against oil companies within the Nigerian Delta region.

Militants in Nigeria have also fueled supply fears, as they have managed to shutter one quarter of the country's crude production, demanding a more equitable distribution of oil wealth within the country.

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