Oil has swung higher again after falling almost 10% on Tuesday on hopes of a short war and limited supply disruptions
War could shut down some Middle East oil production
Light crude in New York traded at $32.29 per barrel in electronic trade at 0456 GMT, after closing down $3.26, or 9.3% at $31.67.
In out-of-hours trade on London's International Petroleum
Exchange (IPE), the international benchmark Brent crude rose 75 cents to $28.00 a barrel.
Brent had slumped by $2.23, or 7.6%, to $27.25 per barrel on Tuesday.
President George W Bush's speech on Monday night, giving Saddam Hussein and his sons 48 hours to get out of Iraq, sparked the dramatic falls.
Traders are awaiting a report on US weekly petroleum reserves later on Wednesday which are expected to
show higher crude stocks but a fall in petrol supplies.
US crude reserves are below 270 million barrels, the government's ideal level for maintaining supply and preventing shocks to the economy.
The recent blockade of Venezuelan producers and high demand due to winter cold snaps has pushed the stocks to 26-year lows.
OPEC President Abdullah al-Attiyah said on Tuesday that the cartel would guarantee supplies if there was a war.