Oil prices pushed above $71 a barrel on Tuesday, spurred by record fuel imports to the world's second biggest energy user China, but the market was cautious ahead of the next set of supply and demand data.
U.S. crude was up 44 cents to $71.04 by 1213 GMT (8:13 a.m. EDT). London Brent crude gained 33 cents to $73.83.
Imports to China surged by 42 percent in July to a record 4.62 million barrels per day as refiners raised output and this gave oil prices an early lift.
OPEC left its forecasts for world oil demand unchanged in its monthly report with consumption expected to fall 1.65 million bpd in 2009 before rising by 500,000 bpd in 2010.
This was regarded as neutral for the market and analysts are braced for the U.S. government's Energy Information Administration (EIA) monthly report at 1600 GMT, which they say will offer further insights into future supply and demand.
The focus is going to be definitely on the demand and people will look for green shoots and upwards revision, said Petromatrix analyst Olivier Jakob.
The United States last Friday reported the first fall in the unemployment rate for 15 months, prompting some oil analysts to anticipate a faster economic recovery, which could revive oil demand.
European shares were lower on Tuesday, but the potentially bearish impact of this news was eclipsed by concerns about a potential shift in oil market fundamentals.
Analysts will also be watching weekly American Petroleum Institute inventory data late on Tuesday, followed by weekly U.S. government data on Wednesday.
The weekly data is expected to show gasoline stocks will have dropped by 1.5 million barrels in the week ending August 7.
Distillate stocks, including diesel, were also seen lower, but overall crude stocks were expected to fall as refineries cut run rates.
Analysts said the slew of weekly and monthly reports had helped steer the focus back to the fundamentals of supply and demand, although financial factors were still a major consideration.
For much of this year, the oil market has taken its cue from rallying equity markets and these have helped to tow prices up from lows of beneath $33 a barrel last December.
By the end of the week we will be back on to financials. It is these factors that are still in the ascendancy, said analyst Simon Wardell of Global Insight, adding that a stronger dollar could cap gains on oil.
A stronger dollar makes dollar-denominated commodities such as oil less attractive to non-dollar buyers.
The dollar's direction could depend on the policy-setting Federal Open Market Committee (FOMC) meeting on Tuesday and Wednesday, although it is not expected to change interest rates in the near term.
(Additional reporting by Maryelle Demongeot; Editing by Keiron Henderson)