Oil steadied above $63 yesterday after accelerating inflation and slowing fuel demand in the United States triggered the biggest one-day fall in four months.
Strong US inflation and an earnings warning from Wal-Mart this week gave traders a signal that record high oil prices were taking an economic toll.
Prices have more than doubled in the past two years on doubts oil nations can pump enough to satisfy demand from the US, China and India.
But US demand in July suffered its biggest monthly drop in over three years and the news coincided with a higher-than-expected rise in July producer prices.
US crude oil traded five cents down at $63.20 yesterday as the market reflected on Wednesday's $2.83 tumble. London Brent was at $62.61, up five cents.