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Crude oil initially fell as much as 2% Tue after China's trade data for July showed exports tumbling at its fastest pace in 3.5 years. By the close, however, crude prices were back in the positive, recovering a little more than they lost a day ago on renewed bull fervor over Saudi production cuts. Optimism over weekly U.S. petroleum balances, due later in the day, also helped the rebound.

"The trade data from China was undoubtedly disappointing as it once again showed sluggish demand both domestically and externally, which is consistent with what we've seen elsewhere," said Craig Erlam, analyst at OANDA.

But Erlam also noted that Saudi production cuts had put a bottom to the market, which "now looks much tighter".

Brent settled up almost 1% at USD86.17, after a session bottom of USD83.33. Brent hit three-month highs last week, reaching USD86.64, and gaining about 17% over the past six weeks.

WTI settled up 1.2% at USD82.92 after tumbling below key USD80 support earlier, to a session low of USD79.94. It gained almost 20% over six previous weeks on the back of Saudi attempts to aggressively slash production. Last week, WTI reached USD83.23 last week for its highest since April.

Overall, Chinese imports contracted by 12.4% in July, far steeper than the expected 5% drop. Exports fell by 14.5%, compared with a fall of 12.5% tipped by economists.

On the oil front, China's crude purchases in July were down 18.8% from the previous month to the lowest daily rate since Jan, but still up 17% from a year earlier, data showed.

"The economy is quite clearly in need of a boost and I'm just not convinced it's going to come, not in the forceful and widespread manner it has in the past," said OANDA's Erlam. "Authorities are more likely to engage in smaller, targeted measures that won't provide the confidence boost investors, or households can really get behind. The sluggish recovery looks set to continue."

Outside of China, fuel consumption in India - third-biggest oil importer and consumer after the U.S. and China, respectively - slipped to a 10-month low in July as monsoon rains restricted mobility.

Market participants were also on the lookout for U.S. weekly oil inventory data, due after market settlement from API.