Oil was steady below $44 on Tuesday, after breaking six straight sessions of losses with a 7 per cent rally on Monday, fuelled by a jump in equity markets and signs of deepening cuts from key supplier Saudi Arabia.

The market is also looking ahead to a Dec. 17 OPEC meeting that is expected to agree more output cuts to help keep oil away from the four-year low it hit last week.

US crude for January delivery was up 16 cents at $43.87 a barrel at 0259 GMT, after surging $2.90 to settle at $43.71 a barrel overnight -- a rebound from a 25 per cent drop last week that was the biggest weekly fall in 18 years.

London Brent crude rose 12 cents to $43.54 a barrel.

"There's some buying interest on the positive news flow coming out of the US – it's a relief rally," said Mark Pervan, senior commodities strategist at ANZ Bank.

"But it could prove to be short-lived – we're going to see more negative economic data that will probably push prices lower."

Washington's efforts to finalise a bailout plan for the stricken US automotive industry overnight helped cheer investors and boosted global equity and commodity markets.

The rescue plan for the "Big Three" auto makers could offer some relief to investors stunned by the loss of half a million jobs in November, which heightened fears that the US economic downturn was deepening.

Japan's Nikkei average was up 0.5 per cent in early Tuesday trade, as Wall Street's overnight rebound buoyed exporters such as Honda Motor.

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