Oil rose toward $65 a barrel on Tuesday after a four-day losing streak and as U.S. crude oil inventories were expected to fall for the fifth week in a row.
U.S. crude futures rose 39 cents to $64.44 a barrel by 1201 GMT, having settled down 4 percent on Monday at $64.05, its lowest settlement in more than a month.
London Brent crude was up 35 cents at $64.40.
Oil prices have fallen seven percent in July and Mike Wittner, Societe Generale's global head of oil research, said some investors were trying to take advantage of the sharp falls in the previous four sessions.
It is not going to continue lower in a straight line. We will see more of bargain hunting by investors, Wittner said.
He said the market focus would shift to a spate of statistics to be released throughout this week and next, including American Petroleum Institute (API), U.S. Energy Information Administration and the International Energy Agency.
Industry group API will release its weekly crude and products stocks data at 2030 GMT.
Analysts polled by Reuters forecast data will show a 2.2 million barrel fall in crude oil inventories, making a fall for the fifth week.
Gasoline and middle distillate inventories were forecast for increases of 800,000 barrels and 1.7 million barrels, respectively.
The EIA will release its monthly report later on Tuesday and weekly statistics on Wednesday.
In June, it raised its forecast for 2009 world demand by 10,000 barrels per day (bpd) to 83.68 million bpd, the first time since September that it had increased the demand estimate in its rolling monthly forecast.
OIL PRICE REVISION
Oil prices have risen from below $33 levels in December last year due to some signs of global economic recovery.
Bank of America-Merrill Lynch said earlier on Tuesday it had raised its oil price forecasts for 2009 to $59 a barrel for Brent and to $58.50 for U.S. crude, up from forecasts of $52 for both benchmarks.
Our price revisions come on the back of a weaker U.S. dollar, a significant improvement in liquidity conditions for the global economy, and a slightly tighter-than-expected global oil market balance, the bank said.
Support also continued to come from Nigeria, where militants have launched at least four attacks against oil installations in the past 10 days, helping to underpin prices on Tuesday.
The main militant group said on Monday it had sabotaged a Chevron
Royal Dutch Shell
(Additional reporting by Ikuko Kao and editing by Keiron Henderson)