US crude held on to its stronger gains, after Brent's expiring February contract rose 76 cents on Monday while its US counterpart only saw electronic dealings for Tuesday trade date due to Monday's US holiday.
"Most of it is WTI playing catch-up from the holiday," added John Kilduff, a partner at hedge fund Again Capital in New York.
"Brent looks to be reflecting the euro zone concerns. The China GDP was good, but exports were down and that highlights the slowdown in Europe."
China's economy grew at 8.9 percent in the fourth quarter of 2011 and though this was better than the forecast of 8.7 percent made by economists in a Reuters poll, it was the weakest pace in 2-1/2 years.
The slowing growth revealed in the GDP data had some traders and investors hopeful that the Chinese might begin monetary easing to limit the deceleration.
Adding to support for oil early on Tuesday, German analyst and investor sentiment recorded its biggest ever rise, with a January reading of -21.6 from the Mannheim-based ZEW economic think-tank, improving from -53.8 in December.
The euro rose against the dollar after two days of losses as risk appetite improved on the better-than-expected German sentiment survey and Chinese economic growth data.
Brent front-month March crude fell 31 cents to $111.03 a barrel at 1:50 p.m. EST (1850 GMT), swinging from $110.56 to $112.76. That intraday peak was above Brent's 200-day moving average of $112.45.
US February crude rose $1.68 to $100.38 a barrel, having traded from $98.60 to $101.01 and with February crude options expiration adding to the choppy price trajectory.
US total crude trading volume was 15 percent above the 30-day average, outpacing Brent turnover that was 11 percent under its 30-day average.
The US stock market also rose as improved sentiment about China's growth prospects countered concerns about Europe in the wake of last week's credit downgrades.
Also supportive was a report showing the New York Fed's Empire State manufacturing index rose to 13.48 in January, beating economists' expectations.
Ratings agency Standard & Poor's downgraded the credit ratings of nine euro-zone countries on Friday, stripping France and Austria of their triple-A status.
Iraq intends to boost crude oil exports by up to 400,000 barrels per day over the next two months, an Iraq industry source told Reuters, adding another factor to limit oil's price gains on Tuesday.
European Union president Denmark proposed that EU states introduce a full embargo on the imports of Iranian crude from July 1, after ending a possible grace period for existing contracts, EU diplomats said.
EU diplomats say the aim is to finalize discussions on the details of the planned embargo by the next meeting of EU foreign ministers on Jan. 23.
Nigerian oil differentials edged lower due to ample February supplies, after the country's unions called off strikes and protests on Monday, ending a confrontation over axed fuel price subsidies that had endangered the OPEC-member nation's oil production.
