US West Texas Intermediate futures were at $37.48 a barrel, down 42 cents from their last close but over 40 percent up from their 2016 low on 11 February.

On the demand side, China's crude imports jumped 19.1% between January and February to 31.80 million tonnes, or about 8 million barrels per day, despite overall weak trading figures released on Tuesday.

"Higher 'teapot' (independent refinery) demand and stronger refining margins which encouraged higher refinery throughputs have contributed to increased imports. Falling domestic crude production is also supportive," said Virendra Chauhan of Energy Aspects.

Despite strong oil demand, questions about the sustainability of growing consumption weighed on markets as China's economic downturn saw its overall exports plummet by a quarter in February in the worst slump since 2009.

China's vehicle sales, a key driver for gasoline demand, in February fell 3.7% from a year earlier to 1.37 million, data from China Passenger Car Association showed.

"This is really a poor start for trade this year," said Zhang Yongjun, senior economist at the China Center for International Economic Exchanges.

Following steady rises from late February on the back of a falling US rig count, oil markets soared from last Friday after Russia's energy minister said that a meeting between Opec and other oil producers about freezing output could take place between 20 March and 1 April.

Late on Monday, South American producers also said they would meet to talk about action to support prices.

Gary Ross, executive chairman at New York-based consultancy PIRA, said that oil would recover to $50 a barrel by the end of the year.

"They (Opec) want $50 oil, this is going to become the new anchor for global oil prices," said Ross.

In anticipation of higher oil prices, traders have started to cut back short positions that would profit from lower prices, while opening up new long positions that bet on higher prices.

But Goldman Sachs cautioned of an overblown price rally.

"While these dynamics (rising prices) could run further, they simply are not sustainable in the current environment ... Energy needs lower prices to maintain financial stress to finish the rebalancing process; otherwise, an oil price rally will prove self-defeating as it did last spring," the bank said in a note to clients.

It added that only later this year would production have fallen enough - driven by cuts in the US, Iraq and Nigeria - to bring it closer in line with demand, although it said it saw a supply deficit by 2017.