By early afternoon in Europe, benchmark oil for February delivery was down 3 cents to $95.53 a barrel in electronic trading on the New York Mercantile Exchange.
The February contract, which expires Tuesday, last settled on Jan. 18 as U.S. markets were closed Monday for Martin Luther King, Jr. Day. The more heavily traded March contract was down 11 cents at $95.93.
The Bank of Japan raised its annual inflation target to 2 percent from 1 percent on Tuesday and said it would continue its asset-purchase program — meant to increase liquidity in the financial system — in 2014.
Concerns linger about the U.S. economy, with lawmakers wrangling over spending cuts and the nation's debt ceiling. Though Republican lawmakers are expected to accept a temporary increase in the borrowing limit, a final deal is still not in sight.
Leaders in the U.S. Congress on Monday unveiled legislation to permit the government to continue borrowing money through May 18 in order to stave off a first-ever default on U.S. obligations. It is slated for a vote on Wednesday.
"Despite the firmer tone in equity markets oil prices have struggled to match the positive sentiment ... Concerns about oversupply continue to limit upside progress," Michael Hewson of CMC Markets said in an email commentary.
Brent crude, used to price international varieties of oil, was up 33 cents to $112.22 per barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex:
— Natural gas added 5.9 cents to $3.625 per 1,000 cubic feet.
— Wholesale gasoline advanced 1.11 cents to $2.8224 per gallon.
— Heating oil rose 2.95 cents to $3.0714 a gallon.