Oil edged up toward $71 a barrel on Tuesday, ending a three-day losing streak, ahead of U.S. data expected to show a fall in gasoline stocks but the market also watched for signs from China of further economic strengthening.
China's industrial output expanded in July at its fastest in nine months, but fell short of forecasts, showing that while the world's third-largest economy was getting back in gear, it was perhaps more gradual than expected.
U.S. light crude for September delivery rose 21 cents to $70.81 a barrel by 0226 GMT, having settled down 33 cents on Monday at $70.60 a barrel as it tracked Wall Street losses.
London Brent crude rose 15 cents to $73.65 a barrel.
There is little fundamentals news and few supply-demand indications. The market is now waiting for oil statistics. The key point is demand for gasoline, said Ryuichi Sato, analyst at Tokyo-based Mizuho Corporate Bank.
A Reuters poll of analysts called a steep 1.5 million barrels drawdown in U.S. gasoline stocks in the week ended August7, deeper than the previous week's 200,000 barrels fall.
But the poll also predicted a bearish 800,000-barrels rise in crude stocks on higher imports and lower refinery utilization.
The American Petroleum Institute will release a first set of data at 2030 GMT, to be followed on Wednesday by data from the Energy Information Administration (EIA).
Oil has more than doubled from this winter's low $30ies but high inventories worldwide onshore and on floating storage have kept prices in check as they suggest still weak demand.
But a slightly brighter economic outlook may prompt the EIA to bolster again its world oil demand forecasts in the August report it is releasing at 1600 GMT, adding to the past two monthly reports' higher forecasts.
In its July outlook, the EIA raised its 2009 global oil demand projection to 83.85 million barrels per day from the previous forecast of 83.68 million bpd -- still well below 2008 levels of 85.41 million bpd.
Traders will also watch the policy-setting Federal Open Market Committee (FOMC) meeting on Tuesday and Wednesday for any action regarding interest rates.
The worst U.S. recession since the Great Depression will probably end in the third quarter, but uncertainty exists over the speed and duration of the economic recovery, according to the most recent survey of private economists.
(Editing by Clarence Fernandez)