New York's main contract, light sweet crude for September delivery, was two cents higher at $125.51 a barrel from $125.49 at the close of trading yesterday on the New York Mercantile Exchange.
Brent North Sea crude for September delivery rose 11 cents to $126.55 after settling at $126.44 in London yesterday.
Both contracts rose by more than one dollar yesterday following a tumble of about four dollars the previous day.
Analysts said a bigger-than-expected increase in US gasoline reserves signalled weaker demand in the United States, the world's biggest energy consumer.
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Ken Hasegawa, manager of the energy desk at Newedge Japan brokerage, said the market had "calmed down" and would trade in a short-term range of $123-128.
"So far, there is no special news in the market," he said.
Prices have tumbled since striking record highs above $147 a barrel on July 11.
Falling demand growth for oil has cooled the market, Hasegawa said. Overall demand is still growing