Front-month Brent was up 88 cents to $122.86 a barrel by 09:45 pm, after settling $1.82 lower at $121.98 in the previous session.

China's trade ministry said it planned to boost energy imports in 2012, and will keep policies to ensure stable export growth, which it expects to improve in the second half of the year.

"China's oil import needs based on continued expansion of infrastructure and strategic storage will continue and it's offsetting the weakness on the demand side," said Torbjorn Kjus, oil analyst at DNBNor.

China's plans on energy imports reinforce a view that Asian demand will continue to support oil prices, even as demand from developed economies is seen as sluggish.

In the US, the pace of job creation by US private employers accelerated in February as the private sector added 216,000 jobs, the ADP National Employment Report showed on Wednesday, topping economists' expectations for a gain of 208,000.

The US Energy Information Administration said that crude oil inventories rose 832,000 barrels week-on-week, close to a consensus forecast for an 800,000 barrel gain. US crude turned higher after the data, and was up $1.11 to $105.81 a barrel.

Iran's offer of talks with major powers also eased concerns about supply disruption, pushing oil prices well below a high above $128 per barrel set last week, a level last hit in July 2008.

US President Barack Obama said an announcement of six-power talks with Iran offered a diplomatic chance to defuse a crisis over its nuclear programme and quieten the "drums of war."

"It was getting quite worrying but tensions have eased and it's looking more like both sides could come out of this without losing face," said David Morrison, market analyst at GFT. However, geopolitical risks remain a key focus for investors. France voiced scepticism the planned fresh talks between six world powers and Iran would succeed since Tehran still did not seem sincerely willing to negotiate on the future of its controversial nuclear programme.