Oil stabilized on Wednesday after two sessions of big drop as investors became more cautious on mixed signals.

Light, sweet crude for October delivery ended at 68.05 U.S. dollars a barrel on the New York Mercantile Exchange, unchanged from the previous session.

Oil prices rose after government data showed a tightening up in the crude and gasoline supplies. According to the U.S. Energy Department's Energy Information Administration (EIA), crude stockpiles dropped by 0.4 million barrels during the week ending Aug. 28 while gasoline inventories dropped by 3.0 million barrels.

However, oil's advance was hauled as the Labor Department said companies slashed spending on everything, including energy because of the economic recession.

In London, Brent Crude for October delivery fell 7 cents to settle at 67.66 dollars a barrel on the ICE Futures exchange.