Oil steadied at $54 a barrel on Tuesday on forecasts for a fall in distillate stocks in the United States after a cold snap, Reuters reports.
The market held its ground after a slide of more than $1 on Monday as investors sold commodities. U.S. light crude was up 12 cents at $54.13 a barrel by 0954 GMT, having fallen $1.41 on Monday. London Brent crude was up 17 cents to $53.85.
The cold snap is likely to have reduced distillate inventories, including heating oil, by 2.2 million barrels last week in U.S. government data due on Wednesday, though crude stocks are seen building, analysts said in a Reuters poll.
Oil is down 11 percent this year on mild U.S. weather and fund selling, though prices have picked up from a 20-month low of $49.90 on January 18 after recent colder weather in the U.S. Northeast, the world's biggest heating oil market.
OPEC producers were set to reduce supply to world markets by 500,000 barrels per day from February 1 and investors were looking out for signs of those cuts.
Some analysts say that the cuts would be enough to prevent further rises in commercial crude inventories when demand falls in the spring.