US West Texas Intermediate (WTI) crude futures were up 1.79 percent, or 79 cents, at USD 44.84 a barrel at 0027 GMT, buoyed by a contractual rollover into higher-demand November as a front-month.
The commodity plunged last week on supply glut worries but bounced slightly yesterday after OPEC member Venezuela said a deal to limit output was close. Unrest in key producers Libya and Nigeria also raised the prospect their exports would be hit.
Global oil supply of 94 million barrels per day needs to fall by about a tenth if it is to match consumption, Venezuela's Oil Minister Eulogio Del Pino said on Monday.
Key crude states are due to meet in Algeria next week to discuss the global supply crisis and overproduction that has hammered prices for two years.
Both contracts rose yesterday on news that 6,000 barrels of gasoline had leaked from the Colonial pipeline that carries fuel from the Gulf Coast to the eastern United States.
Brent crude futures were trading at USD 46.32 per barrel at 0107 GMT, down 27 cents, or 0.6 percent, from their last settlement. US West Texas Intermediate futures were down 24 cents, or 0.6 percent, at USD 43.67 a barrel.
Both main contracts tumbled almost three percent Wednesday after the US Energy Information Administration said gasoline and distilled products inventories rose last week, dampening news of a surprise fall in crude supplies.
US crude inventories dropped by 559,000 barrels in the week to September 9, defying analysts expectations of a crude build of 3.8 million barrels.
As the market eyed a producers' meeting later this month for some reprieve, the International Energy Agency (IEA) said Tuesday that growth in oil demand was slowing while supply was rising.
The American Petroleum Institute (API) reported a crude build of 1.4 million barrels for the week ended September 9, smaller than the 3.8 million-barrel rise expected by analysts. The US government will issue official inventory data on Wednesday.
Janet Yellen hasn‘t yet come out and spoken about a possibility of September hike but in case Fed hikes in September then it will be taken as a big negative at least for few weeks, said Manish Kabra of BoA-ML Global Research.
London Brent crude for November delivery was down 49 cents, or 1.0 percent, at USD 47.52 a barrel by 2246 GMT on Sunday after settling down 4 percent on Friday.
US crude stocks surprisingly plunged by 12.1 million barrels last week, data from the American Petroleum Institute showed after market settlement on Wednesday, compared with expectations for an increase of around 200,000 barrels.
The dollar plunged after data Tuesday showed a shock slump in the key US services sector, virtually wiping out any possibility of an interest rate hike this month.
Oil prices hit a one-week high on Monday after Russia and Saudi Arabia agreed to cooperate on stabilizing the oil market, but they have since fallen due to the mounting uncertainty over a deal.
Saudi Arabia and Russia agreed on Monday to cooperate in world oil markets. Brent jumped almost 5 percent, only to pare gains after Saudi Energy Minister Khalid al-Falih said there was no need to freeze output for now.
Saudi Energy Minister Khaled Al-Falih and his Russian counterpart Alexander Novak agreed to "act together" to steady the market but stopped short of agreeing to a production freeze.
The market is still pricing in a 30 percent possibility of a hike in September. So, the house does not entirely rule out a September rate hike by Fed, said Ian Hui, JP Morgan AMC.
London Brent crude for November delivery was down 15 cents at USD 47.48 a barrel by 0022 GMT, after settling up 80 cents at USD 47.63 on Monday. The global benchmark on Monday hit a near one-week high of USD 49.40 after the Russia-Saudi news.
Both main contracts slumped more than three percent yesterday after Russia suggested it may not be necessary to limit production, denting hopes for its gathering with OPEC in Algeria this month.
Brent crude had climbed 27 cents to USD 45.72 a barrel by 0426 GMT, while US West Texas Intermediate crude futures were up 24 cents at USD 43.40 a barrel, buoyed by a weaker dollar.
Both main contracts plunged yesterday after the US Energy Department said commercial inventories in the world's top oil consumer edged up last week and were now 16 percent higher than the same period last year.
The comments by Bijan Zangeneh, carried by Iran's official news agency on Tuesday, added to a feeling that an informal OPEC meeting with Russia in September may not result in a deal that would boost prices.
Both main contracts tumbled yesterday after Federal Reserve boss Janet Yellen indicated a possible US rate hike this year, sending the greenback rallying and making crude more expensive to holders of other currencies.
Iranian oil minister Bijan Zanganeh on Friday said his country wanted its share of the crude market to return to levels seen before Western nuclear sanctions were imposed on it 13 years ago.