Oil rose past $84, nearing last week's trading ranges before the closure of European airspace and legal action against Goldman Sachs, as upbeat corporate results re-injected optimism into commodities markets.

Apple reported bigger-than-expected earnings on Tuesday, while Goldman's results trounced forecasts, propelling Japan's Nikkei by 1.5 per cent on Wednesday.

The US government sued Wall Street's largest bank on Friday, as disruptions to European travel due to an ash cloud from an eruption in Iceland entered their second day. Jet fuel demand increased on Tuesday as flight bans were lifted.

'At this moment, nothing serious is happening, so the market has calmed down,' said Keichi Sano, general manager of research at SCM Securities in Tokyo, adding that oil was trading 'comfortably' in a range between $80 and $87 after having failed to break below $80 in the past three sessions.

'People got scared on Friday but now found out that it is not urgent to get out of their positions.'

The front-month US crude contract has rebounded almost 5 per cent from a low of $80.53 two days ago, helped by Tuesday's expiration of the May contract.

On Wednesday, June crude added 44 cents to $84.27 a barrel by 0331 GMT. ICE Brent for June rose 36 cents to $85.16.

Prices also got a boost from unexpected drops in US fuel inventories last week and a larger-than forecast decline in crude inventories reported by the industry-funded American Petroleum Institute on Tuesday.

Higher refinery rates offset a rise in imports, leading to a 741,000-barrel drop in crude inventories, according to the API. Gasoline stocks fell 1.7 million barrels in the week to April 16, while analysts had expected a 400,000-barrel gain.

And distillates, including heating oil and diesel, lost a sizable 3.1 million barrels, counter to analysts' forecasts for an 800,000-barrel increase.

Attention was set to turn to government statistics on inventories from the Energy Information Administration (EIA) due at 1430 GMT.

Traders also awaited energy demand signals from Chinese trade data due later on Wednesday.

'The Chinese factor is crucial for the commodities markets, as well as currency issues,' Sano said. 'The trade numbers might give some inspiration to the market about whether the Chinese currency is going to appreciate or not, and that might reflect in the oil market.'

China, the world's second-largest oil user, is under pressure to boost the value of its currency because trading partners including the US say it is undervalued. – Reuters