Oil strengthened above $101 after OPEC left its output unchanged, as expected, despite US calls for action to reduce crude prices.
OPEC ministers meeting in Vienna said recent record high prices had been driven by factors beyond their control, such as a weak dollar, speculation and political strife, not by a lack of oil.
US light crude for April had climbed back above $100 a barrel before the OPEC decision, paring Tuesday's roughly $3 decline. It was $1.86 higher at $101.38 a barrel by 2.22pm.
London Brent crude climbed $1.50 to $99.02.
Delegates said the Organization of the Petroleum Exporting Countries, which accounts for about a third of world oil output, had agreed after less than two hours of talks to keep supplies steady.
US President George W. Bush had warned yesterday it would be a "mistake" for OPEC ministers to ignore the pain record-high oil prices are inflicting on the United States, the world's top energy consumer.
OPEC ministers had said ahead of the meeting oil supplies were ample and there would be no need for additional output.
"This decision comes as no surprise. They don't want to be blamed or seen as the reason for upsetting the global economy right now by pressing for a cut in output," said Samuel Ciszuk, analyst with Global Insight.
"What OPEC does not want, especially Saudi and the Gulf countries, is to actually be seen as one of the main reasons why the global economy goes one way or other."
Just ahead of the meeting on Wednesday, Nigerian Minister of State for Oil Odein Ajumogobia said the main factor pushing prices higher was the weakness of the US dollar.
Saudi Arabia's Oil Minister Ali al-Naimi, OPEC's most influential voice, said in remarks published on Wednesday he saw no need to change production because oil market fundamentals were steady and "healthy". He blamed record high prices on "tremendous speculation".