Investors are waiting for the release this week of the minutes from the Federal Reserve's last meeting that will give clues as to its intentions.
Benchmark oil for September delivery rose 71 cents to $96.68 a barrel in in electronic trading on the New York Mercantile Exchange. The contract had dropped four cents to finish at $95.97 a barrel in New York last night.
Brent crude, which is used to price international varieties of oil, rose 79 cents to $114.48 a barrel in London.
Traders were waiting for the release tomorrow of the minutes to the Fed's July meeting for signs that the central bank might take steps to lower interest rates to spur the sluggish recovery, analysts said.
Lower rates are usually positive for oil prices because they drive investors away from safe haven investments like Treasurys and toward riskier assets like commodities and oil. Investors will also be monitoring fresh information on US stockpiles of crude and refined products.
Data for the week ending August 17 is expected to show draws of 2 million barrels in crude oil stocks and of 1.25 million barrels in petrol stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill.
The American Petroleum Institute will release its report on oil stocks later today, while the report from the Energy Department's Energy Information Administration - the market benchmark - will be out tomorrow.
Oil has risen to around $96 a barrel in recent days from $78 in late June. Investors have also been worried about disruption to oil supplies in the Middle East and North Sea.
In the US, there were also problems with refineries and pipelines in the West Coast and Midwest, including a fire in California. Seasonal factors are also at play as summer blends of petrol cost more and demand goes up as families go on holiday.
Additionally, the Obama administration appears to be concerned about high petrol prices. A senior administration official said last week that the US is considering a release of oil from the country's strategic reserves. It will monitor prices to see whether they fall before making a decision.
