Oil held steady around $109 this afternoon on concerns that a refinery problem in Europe will further tighten fuel supplies in the region.
US crude dipped by 29 cents to $108.80 a barrel at 11.42am, after yesterday's $3 jump. London Brent crude was 26 cents down at $106.89.
London's gas oil futures hit a record high of $1,017 a tonne, scaling new peaks for the second day running.
Yesterday Finnish refiner Neste Oil said repairs on a diesel unit at its 200,000-barrels per day (bpd) Porvoo plant, a leading supplier of high quality fuels to Europe, will stretch through May following a fire on Friday.
European diesel supplies have been tight since last year due to a stricter environmental regulations and refinery outages.
"Most of the support to the oil complex is still coming from the middle distillate part," Olivier Jakob with Petromatrix said in a research note. "Diesel has been supported with fire at the Porvoo refinery."
Distillate supplies, including diesel and heating oil, were also tight in the United States, the world's top energy consumer.
A Reuters poll of analysts forecast weekly US inventory data due out tomorrow will show a 1.4 million barrel drop in distillate stocks for the week to April 4th.
Crude oil inventories were seen rising 2.2 million barrels and gasoline down 2.6 million barrels.
Further adding support to the market, Iran said it had started to set up advanced centrifuges at a uranium enrichment facility.
OPEC's second largest oil producer, Iran has been in a long standing row with the West over its nuclear programmes, which oil investors fear might lead to supply disruptions.
US and Brent crude prices have remained above $100 most of the time since early March, repeatedly prompting the United States to call on OPEC to lift production levels.
Yesterday US Energy Secretary Sam Bodman refreshed the call and he warned that US gasoline pump prices could hit a record $3.50 a gallon during the peak summer driving season.