Balmy weather in the Northeast, the world's largest heating oil market, helped pull US crude briefly to a three-month low of $59.05 a barrel before dealers corrected the slide.
"Support held across the board," said John Kilduff, senior vice president for energy risk management at Fimat USA.
US crude futures have fallen more than $10 from a record of $70.85 hit at the end of August when the first of two major hurricanes thrashed through the offshore platforms of the Gulf of Mexico and battered onshore refineries.
The US energy industry has made some strides in its recovery from the storms, and some signals have emerged that the recent historically high prices have cut into demand.
The US Energy Information Administration said in its most recent data that US fuel demand was running more than two percent below last year.
Mild weather in the Northeast could add to the gloomy demand picture. The National Weather Service said US heating oil consumption will be about 30 percent below normal this week due to the warmth.
"I think the market is going to continue to be rangebound until the demand picture becomes clearer and weather forecasts become more meaningful," said Mike Wittner, head of energy market research at Calyon.
For the longer term, forecasters are predicting a harsher-than-normal winter, just when the oil industry is struggling to recover from the impact of damage inflicted by the most active Atlantic hurricane season on record. "It would take a very mild winter indeed to offset lost US oil product output," said Kevin Norrish, an analyst at Barclays Capital.
Exxon Mobil said Tuesday it had begun start-up of its 190,000 barrel per day refinery in Chalmette, Louisiana, leaving only three refineries, amounting to 5 percent of the nation's capacity, completely shut after damage from hurricanes this summer.
At the peak, the impact of hurricanes Katrina and Rita cut a full quarter of US fuel production capacity.
Offshore, some 1.0 million barrels per day or 66.67 percent of the Gulf of Mexico's 1.5 million bpd of crude production stayed shut after damage from the storms, the US Minerals Management Service said.