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Brent crude futures were stable at $77.20 a barrel by 0806 GMT.
U.S. West Texas Intermediate crude was at $73.10, down 7 cents.
Since peaking above $82 on Monday last week, Brent had shed 6.2%
of its value by the end of trading on Tuesday, closing at a
two-week low of $77.20. WTI fell 7.5% in the same period.
Worries over demand from China, the world's biggest crude
importer, and the dialing back of alarm over war in the Middle
East expanding to threaten crude supply, drove those declines.
U.S. crude oil stocks were seen rising last week, according to
market sources citing American Petroleum Institute figures on
Tuesday. Gasoline and distillate stocks fell, however, according
to the sources.
The United States is the world's biggest producer and consumer
of oil, and growing inventories point to oversupply that could
pressure prices.
Official U.S. government inventory estimates are set to be
released on Wednesday at 10:30 a.m. (1430 GMT).
Meanwhile, U.S. Secretary of State Antony Blinken wrapped up a
trip to the Middle East intended to help broker a ceasefire
agreement in Gaza.
Blinken and mediators from Egypt and Qatar have raised hopes for
a U.S. "bridging proposal," which could shrink the gaps between
the two sides in the 10-month-old war.
"Hopes of a cease-fire between Israel and Hamas have weighed on
oil, along with lingering demand concerns," ING commodities
strategists said.
"While weaker Chinese demand has been well reported, refinery
margins around the globe have been under pressure for much of
August, suggesting that these demand concerns are not isolated
to just China," they said.
The economic struggles in top crude importer China have
continued to hobble the market, as weak processing margins and
low fuel demand curbed operations at state-run and independent
refineries.
Imports of crude oil from top supplier Russia fell in July by
7.4% from a year ago, while fuel oil imports retreated for a
third straight month, customs data showed this week.
(Reporting by Paul Carsten in London, Laila Kearney in New York
and Jeslyn Lerh in Singapore;Editing by Shri Navaratnam, Kim
Coghill and Sharon Singleton)
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