Expectations that the US Federal Reserve would announce a third round of bond buying on Thursday also supported oil prices, although investors declined to make big bets until the Fed confirms it will indeed act to stimulate the world's top economy.
London Brent crude for October delivery, which expires on Thursday, was up 20 cents at $115.60 a barrel by 0555 GMT, its loftiest in a week.
US crude for October delivery gained 1 cent to $97.18 a barrel.
Ahead of the Fed's decision, all eyes are on the German court ruling.
"If (the bailout fund) was ruled illegal, it would be a surprise, sending shares and the euro down sharply," said Masaki Suematsu, energy team sales manager at Newedge Japan.
A jump in the dollar versus the euro could weaken dollar-denominated commodities like oil since it makes them more expensive.
Technical charts suggest Brent crude could target the Sept. 4 high of $116.65, while US oil may retest a resistance level at $97.37, a break above which would open the way towards $98, according to Reuters technical analyst Wang Tao.
"October (Brent) crude is likely to rise gradually helped by the usual short covering ahead of the expiry on the 13th, though some adjustments may take place as (the front-month) contract switches to November," said Kaname Gokon, deputy general manager of research at Okato Shoji.
OIL RESERVES
The US government and OPEC offered differing outlooks for global oil markets on Tuesday, with Washington ratcheting up price forecasts for oil on stronger demand, while OPEC highlighted rising output from the exporter group.
But both stressed the possibility that a worsening European crisis could still drag down oil prices, warnings that may complicate deliberations over whether to tap into strategic oil reserves again.
The International Energy Agency (IEA) normally coordinates strategic stock releases by member states, though some analysts think the US could act unilaterally or in concert with individual members if widespread agreement on a move cannot be reached.
OPEC production rose about 260,000 barrels per day (bpd) in August, the producer group said on Tuesday, as dwindling Iranian exports in the face of European and US sanctions over its disputed nuclear programme were offset by other nations in the 12-member group.
The US government's Energy Information Administration (EIA) on Tuesday raised its forecast for global oil demand growth and lowered non-OPEC oil production for 2013, but added that non-OPEC output is expected to increase enough to meet demand.
US crude stocks rose 221,000 barrels last week, the American Petroleum Institute said on Tuesday, against expectations that inventories would be 2.6 million barrels lower.
The API data will be followed by more closely watched numbers from the US Energy Department due at 1430 GMT. Investors were also looking out for the IEA's monthly report on global oil markets later in the day.