London's Brent Blend crude futures for September delivery ended 21 cents higher at $27.14 per barrel while U.S. Benchmark crude futures were up 36 cents at $27.75. Brent's gains followed a fall on Monday to a near-three month low of $26.65. Traders were focussing on weekly figures from the American Petroleum Institute (API) industry group assessing U.S. Fuel inventories due out later . With a moderate build in crude and distillate stocks expected, traders want confirmation that the United States is soaking up near-record crude imports as seen last week.

The market was also awaiting comments from the Organisation of Petroleum Exporting Countries (OPEC) over current price levels. Oil has declined almost $3 per barrel in July since OPEC kingpin Saudi Arabia began discretely leaking extra barrels. Riyadh increased exports unilaterally in July after failing to gain support from other OPEC members to raise production by 500,000 barrels per day under a mechanism agreement. Half its increase is due to be pumped in August, but traders wonder whether that full amount will be forthcoming now prices have moderated from around $30 a barrel.

"The OPEC basket price is now perilously close to $25, whereupon the market will expect Saudi Arabia to cease their extra production seen in the last couple of weeks," said London-based brokers GNI in a daily report. OPEC's Vienna headquarters said the reference basket price stood at $25.17 per barrel on Monday, down from $25.52 on Friday. Sanctions-bound Iraq plays no part in output curbs.

Under an OPEC agreement, the release of 500,000 bpd of group production is triggered on a pro rata basis among 10 of the group's 11 members if the price of a reference basket of seven crudes moves above $28 for 20 consecutive business days.