Brent crude stayed above $100 per barrel this morning, after a more than 2 per cent rally in the prior session, as uncertainty over whether the US Federal Reserve would launch more stimulus measures curbed investors' appetite for riskier assets.
Minutes from the central bank's June meeting suggested the US economy may need to worsen before the majority of policymakers will consider a third round of bond buying that could weaken the greenback and draw investors to buy dollar-denominated commodities.
"Traders are starting to look forward for stimulus measures, particularly from China. We can see confidence improving a bit," Ric Spooner, chief market analyst at CMC Markets in Sydney, said.
Further US stimulus measures are "probably a few months away" if the employment situation does not improve, he added.
China is due to release GDP data on Friday that could show the weakest expansion in three years. If confirmed, the figures could help support oil as investors expect the government to introduce measures to boost the economy.
The grim outlook for the global economy, already roiled by the festering debt crisis in the euro zone, has muddied the demand outlook for most commodities. Oil has been hit hard, with prices suffering their largest three-month drop since the 2008 financial crisis in the second quarter.
Oil prices have rebounded from their June lows of below $90 for Brent and around $77 for US crude as investors pumped in money after a debt deal in Europe sparked a buying frenzy across commodities.
Bloomberg
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