Crude futures settled slightly lower Wednesday, as investors paused ahead of weekly U.S. oil-inventory data and a key jobs report later this week.

Light, sweet crude for August delivery settled 24 cents lower, at $96.65 a barrel on the New York Mercantile Exchange, after falling as low as $95.90 in overnight trading. Brent crude on the ICE futures exchange closed 1 cent higher, at $113.62 a barrel.

Oil prices held close to flat for most of the trading session after rebounding from early lows following the decision by China to raise interest rates. Traders say they are holding off on making bets until clearer signals emerge on how the U.S. economy is faring, and whether U.S. oil supplies would continue to decline.

On Friday, the government is set to release its monthly employment report, which is expected to show a modest 54,000 increase in U.S. jobs in June. Recent economic data has made oil traders cautious about betting on higher prices, as a slowdown in the U.S. recovery will likely mean lower consumption of oil and fuel products.

Separately, U.S. oil stockpiles are expected to show a fall of 2.4 million barrels when data from the Department of Energy, due 11:00 a.m. EDT Thursday, is released. Gasoline inventories are seen rising by 200,000 barrels, while stocks of distillates, including heating oil and diesel, are expected to rise by 900,000 barrels.

"We're getting inventories tomorrow, and Friday is the big jobs number. We're going to be sitting on our hands until then," said Stephen Schork, head of trading advisor Schork Group.

Uncertainty surrounding the direction of the global economy has left the oil market without clear signs of how oil demand will fare through the rest of the year. The U.S. is entering a slow patch in its recovery, while the Euro-zone struggles to contain Greece's debt crisis. Meanwhile, Chinese authorities are attempting to slow down a rapid rise in the price of food and other goods, but measures to contain inflation could also hamper economic growth.

The People'e Bank of China said early Wednesday it will raise benchmark interest rates by 0.25 percentage point, the third increase this year.

The move initially stung crude markets worried about the country's ability to control inflation while also maintaining growth rates. But futures quickly rebounded, which some analysts took as a sign of market optimism.

"While today's trade had all of the appearances of a holding pattern...the complex still sent off some bullish signals given its ability to easily absorb some seemingly negative news," said Jim Ritterbusch, head of trading advisor Ritterbusch and Associates, in a client note.

Crude futures have held below $100 a barrel for nearly a month, settling around the mid-$90 range. A drop towards $90 following the decision last month by the International Energy Agency to release 60 million barrels from strategic reserves was quickly reversed.

Front-month August reformulated gasoline blendstock, or RBOB, settled 2.02 cents, or 0.7% higher, at $2.9976 a gallon. August heating oil settled 0.67 cent higher at $2.9633 a gallon.