Oil was steady above $68 today, after settling unchanged a day earlier, as a steep fall in US gasoline inventories offset a smaller-than-expected drop in crude stocks in the world's top energy user.
Traders will scour weekly jobless claims and a gauge of non-manufacturing sector activity for August due later for clues on how strongly the US economy is recovering.
By 6.40am, US crude for October delivery was up 23 cents at $68.28 a barrel, after settling at $68.05 today. London Brent crude rose 8 cents to $67.74 a barrel.
While steady for the last two days, oil is still down more than 6 percent so far this week, having dropped nearly $5 a barrel on Monday and Tuesday as worries over the health of the global economy and the US financial sector sent investors scurrying for cover.
"The main drivers will be the US dollar and the stock market, which is currently in a correction phase, so the crude market is going through the same," said Sumisho Sano, General Manager of SCM Securities Research.
"The stock market has largely discounted the recovery of the economy. Sentiment will be weak in the short term."
US inventories sent mixed signals, with a 400,000-barrel drop in crude stocks last week, but gasoline inventories showed a steep 3-million-barrel drop as US fuel demand rose slightly over year-earlier levels.
Economic data was also not convincing, with US private employers cutting 298,000 jobs in August, less than July but more than the 250,000 job losses economists had expected, while new orders at US factories rose 1.3 per cent in July, but below economists' expectations.
Key data due later is expected to provide more trading cues.
Reuters