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US crude futures rose to $63.82 a barrel, its highest since December 2014, boosted by a surprise drop in US production and lower crude inventories.
Positive brokerage recommendations on oil majors Exxon and Chevron lifted their shares, helping the S&P energy index climb 0.62 percent.
"It's back to a generally positive mode," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
At 9:34 a.m. ET (1434 GMT), the Dow Jones Industrial Average was up 46.19 points, or 0.18 percent, at 25,415.32 and the S&P 500 was up 5.29 points, or 0.19 percent, at 2,753.52.
The Nasdaq Composite was up 12.79 points, or 0.18 percent, at 7,166.36.
The S&P and the Nasdaq snapped their six-day rally on Wednesday after Bloomberg News reported Chinese officials had recommended halting its U. S. bond purchases, which China dismissed later.
Also weighing on the dour sentiment was a Reuters report on Wednesday that Canada is increasingly convinced U. S. President Donald Trump would soon announce an exit from the North American Free Trade Agreement.
"I think it is very disruptive.
We've seen a lot of firms concerned about supply chains going forward, and many have tried to secure alternative supply-chains if the President pulls out of NAFTA. But the market is just taking this in a stride now," Brown said.
Investors will be looking at the fourth-quarter earnings season, which kicks into full gear on Friday with big U. S. lenders JPMorgan and Wells Fargo.
Earnings for S&P 500 companies are expected to increase by 11.8 percent on average, with the biggest contribution from the energy sector, according to Thomson Reuters I/B/E/S.
Technology and industrial stocks were among the biggest gainers. Boeing rose 1.5 percent and Caterpillar gained 0.7 percent, boosting the Dow.
Apple's 0.6 percent gain provided the biggest boost to the S&P and the Nasdaq.
Delta Air Lines was up 1.31 percent after the company's profit for the fourth quarter beat estimates.
Xerox shares jumped 5 percent after the Wall Street Journal reported the copier maker was in deal talks with Japanese camera maker Fujifilm Holdings that could include a change in control of Xerox.
Data showed U. S. producer prices fell in December for the first time in nearly 1-1/2 years amid declining costs for services, which could temper expectations that inflation will accelerate in 2018.
Other data showed the number of Americans filing for unemployment increased for the fourth straight week to more than a three-month high.
Advancing issues outnumbered decliners on the NYSE by 1,783 to 753. On the Nasdaq, 1,552 issues rose and 883 fell.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty and Arun Koyyur)