Brent crude reversed course after poking above $104 on Wednesday, after data showing fuel stockpiles fell in the United States gave way to a broader sell-off engulfing the stock market.
Weekly data from the U.S. Energy Information Agency showed more than 6 million barrels were drained from crude stockpiles last week versus forecasts for a decline of 400,000 barrels.
Oil had already drawn support from weekly data provided by the American Petroleum Institute (API) that showed a surprise 7.8-million-barrel drop in crude stocks.
But crude gave up most of the day's gains as the Dow Jones Industrial Average tumbled in the wake of weak U.S. data, which stoked new fears about demand.
"We got a confirmation that API was not off the mark. The drawdown put a bid in the market again," said Gene McGillian, analyst with Tradition Energy in Stamford, Connecticut.
"The decline in inventories means that we've weathered the test of dropping below $92 (for U.S. crude) and now we're pushing it higher."
Supplies from OPEC producer Iran were meanwhile tightening, squeezed by Western sanctions.
Crude shipments dropped to 700,000 barrels per day (bpd) last month, about a third of Iran's exports before the current round of sanctions aimed at pressuring Tehran over its suspected pursuit of nuclear weapons.