Oil resumed gains above $87, bouncing from the earlier losses, as the International Energy Agency said oil prices would exceed $100 a barrel in the next five years.
US crude oil futures rose 25c to $87.30 a barrel, having fallen to as low as $86.44. ICE Brent was trading 21c higher at $88.67.
US crude hit a two-year high of $87.49 yesterday.
Oil reversed course following the release of the IEA's long-term energy outlook, in which the Paris-based agency said oil prices might exceed $100 a barrel in 2015 and $200 in 2035.
Analysts said the $100 mark provided a clear price target for investors, but return on investments might not be dramatic.
The IEA also cut its 2035 oil demand outlook by 6m barrels per day (bpd) to 99m bpd from its estimate a year earlier.
