Internationally traded Brent futures were at $44.66 a barrel, up five cents.

"The focus for markets this week will be the 168th Opec Conference on Friday and US crude oil inventories. The market will now be expecting crude oil stocks to decline through to the end of the year, in line with seasonal patterns. A failure to do so could see WTI crude fall through $40 per barrel in coming weeks," ANZ said on Tuesday.

On Opec policy, which is heavily influenced by its biggest producer, Saudi Arabia, the bank said that it expected "to see Saudi Arabia hold and keep oil production steady in the face of declining prices."

Opec has shown resolve to stick to the decision adopted at last year's policy meeting to pump oil vigorously to protect its market share against other producers like Russia and especially US shale drillers.

Financial traders are acting accordingly, with hedge funds' bullish wagers on US crude falling to a more than five-year low amid concerns that oil output in the US was not falling fast enough to offset a global supply glut that has resulted in a more than 60% price rout since June last year.

US government data showed no meaningful decline in shale output despite falling rig counts, adding to a glut that is seeing 700,000-2.5 million barrels per day produced beyond demand.

Morgan Stanley said that an increase in US interest rates expected this year will delay a rebound in oil prices.

"We think the USD continues to strengthen after a December liftoff, delaying the rebound in oil prices until 4Q16," the bank said.

The bank added that it saw oil oversupply to persist until mid-2016.

"Oversupply in oil markets could disappear by year-end. This drives a 4Q rebound in our price expectations, which we expect to continue into 2017."

In fundamentals, China's economy showed renewed signs of weakness, with its manufacturing falling to a three year low

However, Japan's manufacturing accelerated, albeit at low levels.