Oil rose slightly as expectations of steady global consumption growth and a surprise fall in U.S. stockpiles held the benchmark above $109 a barrel.
"Downside risks for oil seem to be very limited," said Tetsu Emori, a commodities fund manager at Astmax Investments in Tokyo. "I think oil prices have bottomed out, and overall, we will see a recovery."
But a mildly bearish report from the International Energy Agency (IEA) that said that production in the United States would be enough to protect against most potential supply shocks, put pressure on prices.
Brent crude rose 13 cents to $109.78 a barrel by 1025 GMT, swinging between a high of $109.89 and a low of $109.32 earlier in the session.
U.S. oil rose 33 cents to $92.86, gaining for a fifth day in the longest daily winning streak since mid-December.
But some analysts did not rule out further falls.
"Watching the 200-day moving average is going to be key - if Brent breaks this barrier, you could see pressure again," said oil analyst Olivier Jakob at Petromatrix in Zurich.
The Organization of the Petroleum Exporting Countries (OPEC) in a monthly report left its forecast for growth in global oil consumption unchanged for now, still expecting an expansion of 840,000 barrels per day (bpd) this year.
But it warned demand growth could miss forecasts due to economic weakness and that growing U.S. supply would hit its highest in three decades.
OPEC, the source of more than a third of the world's oil, expects the U.S. economy to expand by 1.7 percent in 2013, down from the 1.8 percent previously thought. Growth in the euro zone is now seen contracting by 0.2 percent, having earlier been expected to expand slightly.
A similar monthly report by the U.S. Energy Information Administration (EIA) cut its 2013 world oil demand forecast slightly, but also cut the forecast for non-OPEC output.
Uncertainty over Europe's economic outlook, worries about central banks pulling the plug on easy monetary policy and concerns of an uneven recovery in China have shaved around $10 a barrel off Brent since the high of more than $119 touched by the contract in February.
"For developing Asia, the outlook is less positive, where leading indicators point towards a below-trend growth for China and India," JBC Energy said in a report.
Still, positive data out of the United States, subsequent assurances by the U.S. Federal Reserve of continuing with its easy policy, and lingering worries of supply disruption from the Middle East may help push prices higher, Emori said.
Brent remains neutral in a range of $109.14 to $111.33 per barrel, while U.S. oil is expected to test resistance at $93.72, according to Reuters technical analyst Wang Tao.
Oil, particularly the U.S. benchmark, was supported by a report from the American Petroleum Institute (API) that showed U.S. crude inventories fell 1.4 million barrels last week. The market had been expecting a rise of 2.3 million barrels, according to a Reuters poll.
During the same week, gasoline inventories fell 3.1 million and distillates declined 2.2 million barrels, the API said. (Additional reporting by Manash Goswami and Ramya Venugopal in Singapore; editing by Jason Neely)