Oil rose more than $1 to above $133 a barrel today after plunging nearly $5 in the previous session on China's unexpected fuel price rise.
US July crude, which expires today, rose $1.68 to $133.61 a barrel by 11.50am, after slipping earlier in the day. London Brent was $2.04 up at $134.04.
China, the world's second-largest oil consumer, raised pump gasoline and diesel prices by up to 18 per cent yesterday, its first hike in eight months, as the government bowed to a nearly $40 increase in crude prices since the last hike in November.
The market was still grappling with what kind of impact the Chinese move would have.
Some analysts said it might bolster consumption by encouraging healthier supply at the pumps, which had faced long queues and rationing as refiners cut back on production to limit hefty losses made by selling discounted fuel.
Demand from China, India and the Middle East has been cited as a factor behind oil's almost sevenfold surge from $20 six years ago to a record high of nearly $140 a barrel this week.
High fuel costs have already shown signs of denting demand in other consumers, such as the United States and Britain.
In Nigeria militants in speedboats attacked Royal Dutch Shell's 220,000-barrel-per-day Bongas offshore facility cutting oil output at the world's eighth-largest oil producer by a tenth.
Shell said it was too soon to say how long output at the deepwater installation would be shut down. OPEC member Nigeria is already producing about 20 percent below potential due to sabotage by militants in the Niger Delta oil hub.
Meanwhile, Saudi Arabia said it would do all it could to stabilise global oil markets ahead of a meeting between consumers and producers on Sunday to discuss oil prices.