U.S. light crude for November delivery rose 26 cents to $106.87 a barrel by 0153 GMT, after settling down $2.76 at $106.61 on Tuesday. London Brent crude rose 30 cents to $103.38.
The losses on Tuesday followed a record surge of nearly 16 percent in the now-expired U.S. October crude contract on Monday. The U.S. Commodity Futures Trading Commission said it was reviewing the price jump to ensure trading was valid.
"Uncertainty about the progress of the U.S. troubled asset purchase plan and worries about the international economic outlook remain dampening influences on oil prices," David Moore, a commodity analyst at the Commonwealth Bank of Australia, said in a morning note to clients.
Oil jumped nearly 7 percent on Friday to cap its biggest three-day rally in a decade on expectations a $700 billion U.S. government bailout plan would put an end to the global financial crisis and support demand in the world's top energy consumer.
But the initial euphoria has given way to doubts amid concerns that political resistance could delay the rescue package.
Oil has gained 11.4 percent so far this year on geopolitical tensions between Iran and the West, supply disruptions in Nigeria and falling U.S. dollar, but is still 27 percent below the record price over $147 it hit in mid-July.
A Reuters poll of analysts ahead of weekly U.S. government inventory data due later on Wednesday forecast that crude stocks fell for the fifth week by 2.0 million barrels last week due to disruptions caused by Ike.
Distillate stocks were forecast to have fallen by 1.5 million barrels, with gasoline stocks expected to have dropped for the ninth straight week by 4 million barrels after Ike shut Gulf Coast refineries.
Energy firms continued to work on restarting production, refineries and pipelines after Hurricane Ike battered U.S. oil infrastructure. But nearly 70 percent of production remains closed in the Gulf of Mexico.
Author: Jo Amey
