Oil prices were steady on Wednesday as traders waited for fresh data later in the day on the health of US fuel stockpiles.
US light crude for September delivery was one cent to $40.45 a barrel after falling $1 on Tuesday. In that session the expiring August crude contract briefly touched a six-week peak at $42.30, just 15 cents off the all-time high for US crude futures at $42.45, before falling back sharply.
London's Brent crude rose 15 cents to $37.16 a barrel. Dealers said on Tuesday's sell-off was led by a steep fall in US gasoline, which tumbled 3.5 percent to break below $1.25 a gallon, on perceptions that supplies were meeting summer demand.
US gasoline consumption rises to a peak in the summer holiday months, accounting for roughly 12 percent of global oil demand, and is a barometer for overall strength in demand.
Low inventories in the second quarter had prompted concerns of a supply crunch.
"The feeling is we're getting through summer without any major supply issues," said Tom Benz, analyst at BNP Paribas.
US gasoline inventories are predicted to show a decline when the government Energy Information Administration (EIA) releases its weekly oil stocks report on Wednesday.
Seven analysts surveyed by Reuters forecast that gasoline inventories would fall by 980,000 barrels.
The survey saw crude and distillate stockpiles rising by 1.2 million barrels and 900,000 barrels, respectively.
Crude prices have stayed above $35 a barrel for most of the year as demand has shown the strongest growth for more than two decades, while producers have turned up production to almost full tilt, leaving little leeway for disruptions to supply. Fresh data from Chinese Customs on Wednesday showed June crude imports at a record of more than 11 million tonnes, while the country's buying for the first six months rose 39 percent from a year ago to a little over 61 million tonnes.
China, which imports roughly one-third of its crude oil needs, overtook Japan last year to be the second biggest oil consumer after the United States.
Strong demand has heightened concerns over a lack of spare capacity with by geopolitical tensions in Iraq, Saudi Arabia, Nigeria, Venezuela and Russia all major oil-producing nations.
"With demand growing so rapidly any major disruption in these would quickly tighten the market," consultant Geoff Pyre said in a report Semipro Energy.
The Opec producers' cartel, which cancelled last week a policy meeting scheduled for Wednesday, will raise its official output ceiling by 500,000 bpd from August 1 to 26 million bpd, although actual group production is estimated roughly two million bpd above that level.
Opec President Purnomo Yusgiantoro said on Wednesday the Organisation of the Petroleum Exporting Countries only had spare capacity for the short term.
"We have spare capacity but for the short term. Therefore, we call on non-Opec producers to help add to supply to stabilise oil prices," Purnomo said.
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