Oil prices rose on Tuesday after falling earlier in the day as European equities slid and the dollar strengthened, traders said.
New York's main contract, light sweet crude for delivery in December, rose 64 cents to 78.77 dollars a barrel after falling by a similar amount earlier.
Brent North Sea crude for December climbed 74 cents to 77.29 dollars.
"The moves higher are still very aggressive but they are now running into general drifting lower during periods," said Capital Spreads analyst Simon Denham.
Traders cited a strengthening dollar, which makes dollar-priced crude more expensive for buyers holding foreign currencies, for dampening oil demand.
Meanwhile global equity markets slid Tuesday as sentiment wobbled amid doubts about the prospects of a global recovery from recession and ahead of a US Federal Reserve interest rate decision.
A huge takeover bid by billionaire investor Warren Buffett's Berkshire Hathaway for the Burlington Northern Santa Fe railway company was not enough to lift stocks into positive territory, analysts said.
Buffett said the acquisition of 77.4 percent shares in BNSF it does not already own would be Berkshire's biggest acquisition and represents "an all-in wager on the economic future of the United States."
Elsewhere on Tuesday, Iraq formally signed a deal with British energy giant BP and China's CNPC to almost triple oil production at a giant southern oilfield.
"The two companies will invest 50 billion dollars in the project," Iraqi Oil Minister Hussein al-Shahristani told reporters.
The 20 year contract is expected to boost production at the Rumaila field from the current one million barrels per day to around 2.8 million bpd within its first six years, the minister said.
Oil had risen sharply on Monday, buoyed by a weaker dollar and positive US and Chinese economic data that bolstered hopes of stronger demand in the two biggest energy-consuming nations.
On Monday, the Institute of Supply Management said its factory index, also known as the purchasing managers index, grew for a third consecutive month in October with a reading of 55.7 percent.
It was stronger than market expectations for a reading of 53 percent and the highest rate of growth since April 2006. Any number above 50 indicates growth.
The US is the world's biggest energy user and a recovery in its economy is seen as key to oil demand, which has been hit by the global financial crisis.
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