Oil prices rose more than 1.5 percent on Wednesday, extending gains from the previous day as the U.S. government cut its crude production outlook for next year and as fuel inventories plunged.
Investors, however, were also awaiting the consumer price inflation data, which is expected to cool to a record low of 1.70 percent in June, easing further from May's 2.18 percent, according to a Reuters poll.
Markets are also keeping an eye on corporate earnings including from Tata Consultancy Services Ltd on Thursday and Infosys Ltd on Friday.
Analysts think the Indian market is over-stretched and they warn about a potential correction after indexes hit record highs in each of the two previous sessions.
"If the NSE (index) doesn't cross 9,830 today, we could see a correction of around 150-250 points by this week," said AK Prabhakar, head of research with IDBI Capital.
"I think the sentiment is tepid for June-quarter results and the impact of GST (goods and services tax) will only be properly realised in the second half of the year."
The broader NSE Nifty was up 0.21 per cent at 9,807.4 as of 1:10 pm, while the benchmark BSE Sensex was 0.06 per cent higher at 31,767.65.
Reliance Industries gained 2 per cent while state-run Oil and Natural Gas Corporation Ltd rose as much as 3.5 per cent.
Among other gainers, liquor stocks rose after India's apex court clarified that the ban on sale of alcohol within 500 metres of any state or national highways will not cover roads within city limits.
Som Distilleries Ltd, Globus Spirit Ltd and Tilaknagar Industries Ltd gained between 2.7 per cent and 13.8 per cent.
Disappointing June-quarter results saw CCL Products India Ltd slip as much as 7 per cent. The company posted a 33 per cent drop in net profit for the quarter.
© Thomson Reuters 2017