By early afternoon in Europe, benchmark crude for January delivery was up 62 cents to $88.55 per barrel in electronic trading on the New York Mercantile Exchange. On Tuesday, the contract added 73 cents to close at $87.93.
In London, Brent crude, which is used to price international varieties of oil, was up $1.06 to $109.90 a barrel on the ICE Futures exchange.
A survey by the Ifo institute said its main index rose to 102.4 from 101.4 the month before. The survey shows growing confidence in the German economy, based on a poll of 7,000 business executives.
Many economists think Germany will avoid a recession before growth improves next year. That could lead to rising demand for energy in Europe's biggest economy.
The Ifo survey results also helped lift the euro against the dollar. A weaker dollar makes crude cheaper — and a more attractive investment — for traders using other currencies. On Wednesday, the euro was up at an eight-month high of $1.3298 from $1.3227 late Tuesday in New York.
Oil prices were also supported by a drop of 4.1 million barrels in U.S. crude stocks, as reported by the American Petroleum Institute. The Energy Department's Energy Information Administration will issue its own set of data — the market benchmark — later Wednesday.
Analysts said increased geopolitical risks were gaining relevance again.
"Prices are also finding support from reports that negotiations between South Sudan and Sudan have become stuck in a rut," analysts from Commerzbank in Frankfurt said. "It is therefore questionable whether the export of South Sudanese crude oil via Sudan can be resumed as agreed in a security treaty in September. We see the latent supply risks as an important crutch for oil prices next year."
Other energy futures on the New York Mercantile Exchange:
— Heating oil advanced 2.79 cents to $3.0218 a gallon.
— Natural gas fell 7.9 cents to $3.339 per 1,000 cubic feet.
— Wholesale gasoline added 2.26 cents to $2.7068 a gallon.
Pamela Sampson in Bangkok contributed to this report.