Oil prices rose above $116 a barrel Wednesday as investors awaited a weekly crude inventory report which was predicted to show a drop in U.S. gasoline stocks.

By the afternoon in Europe, light, sweet crude for September delivery was up $1.55 to $116.08 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the session, it traded as low as $114.26 before rebounding.

The contract rose $1.66 to settle at $114.53 a barrel on Tuesday.

Investors are waiting for a report later Wednesday by the U.S. Energy Department's Energy Information Administration on U.S. oil stocks for the week ended Aug. 15. The petroleum supply report was expected to show that gasoline inventories fell by 3 million barrels, according to the average of analysts' estimates in a survey by energy information provider Platts.

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