Oil prices steadied above 48 dollars a barrel on Tuesday, recovering from earlier losses as the dollar weakened against the euro.
Brent crude oil futures rose 22 cents to 48.38 dollars a barrel.
U.S. West Texas Intermediate (WTI) crude futures rose 10 cents to 45.25 dollars a barrel.
The euro rose for a second day against the dollar after an 11-year low on Monday.
Prices were also supported after the Secretary-General of the Organization of the Petroleum Exporting Countries, Abdullah al-Badri, said oil prices may have bottomed out.
He warned of a jump of oil price to 200 dollars a barrel if investment in new supplies was too low.
Michael Hewson, chief market analyst at CMC Markets, said that the effects of the weakened dollar and the residual effect of Badri’s comments were temporary.
“I certainly don’t think it changes the fundamental dynamic of the direction of prices with regard to oil,” said Hewson.
“When you look at where Brent is and where it’s been, there’s a pretty solid floor at the moment around 47 dollars a barrel.”
Standard Chartered said OPEC’s decision to keep production high was beginning to impact other producers.
“Non-OPEC output is being hit hard, and we now expect the oil market to tip into supply deficit in H2,” the bank said.
Traders said there were other signs of a potential market pick-up.
“I’m not sure if prices have bottomed out, but I can see some signs for prices to rebound,” said Yusuke Seta, a commodity sales manager at Newedge Japan.
He was referring to a rise in Brent’s open interest in the past few weeks.
Brent’s open interest on the Intercontinental Exchange (ICE) hit 1.69 million lots in the week of Jan. 20, a record high since the data started in 2011.
The next data on supply will come later in the day from U.S. commercial crude stockpiles, which likely rose nearly 4 million barrels last week, a Media survey showed.
U.S. crude stockpiles posted the largest build in 14 years in the previous week.
Trading volumes are likely to be limited later on Tuesday as a snow storm is expected to disrupt transport in New York, reports Reuters.