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.
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
