Oil prices bounced one percent higher, back above $63 a barrel, on Tuesday as the market balanced prospects of a further OPEC cut against milder weather and high fuel stocks in top consumer the United States, Reuters reported.
U.S. crude was up 66 cents at $63.10 a barrel at 1124 GMT, having dropped 99 cents on Monday. London's Brent crude was up 67 cents at $64.07.
Oil has whipsawed between a record high of $78.40 in July, when fighting between Israeli forces and Hizbollah guerrillas in Lebanon raised fears of a broader Middle East conflict, and a low of $54.86 in November.
OPEC has signalled it will cut when it meets next week but I think the market is basically shrugging its shoulders," Andrew Harrington, a resource analyst at ANZ, said.
"The inventory level is still very high." In absolute terms, crude oil stocks in the United States are at their highest level for the time of year since 1991.
Analysts polled by Reuters expected a U.S. government report on Wednesday to show a modest 400,000-barrel decline in distillate stocks, which include heating fuel, and a moderate increase in crude inventories