Oil edged up on Thursday, recovering from losses of more than $3 over the past two days as a hefty increase in US crude stocks compounded concerns of a slowing economy in the world's top energy consumer.
US light crude for February delivery rose 36 cents at $91.20 a barrel by 0734 GMT.
The contract ended down $1.06 at $90.84 on Wednesday, after hitting a low of $89.26, the weakest level in nearly a month, on weekly data that showed a larger-than-expected rise in US crude inventories.
London Brent crude for March was up 39 cents at $89.89 a barrel.
"After a $10-loss from the record $100, prices are just going to bounce back on short-covering. There is no fundamental bullish news and after short-covering, prices will go down again," said Ken Hasegawa of brokerage company Newedge.
US crude stocks swelled by 4.3 million barrels to 287.1 million barrels last week, the first build in nine weeks, and well above the 600,000-barrel rise forecast, the Energy Information Administration data showed.
Oil products stocks also rose, with gasoline stocks up 2.2 million barrels for the 10th straight week, while distillates, which include heating oil and diesel fuel, rose for the third consecutive week, up 1.1 million barrels.
The arrival of US refinery maintenance season is also expected to cause a decline in crude usage. The report showed a drop of 760,000 barrels per day (bpd) in crude runs at domestic refineries to 15.1 million bpd.
Opec officials have hinted that they did not see the need to increase supplies when the organisation meets next month.
Oil prices are likely to range between $80 and $90 a barrel in the first quarter but are difficult to forecast for the rest of 2008 due to the possible impact of the subprime crisis, Opec's president said on Wednesday.
Chakib Khelil said in a briefing for businessmen in Algiers that if oil inventories recovered in the second quarter, he did not see why Opec should raise output.
The International Energy Agency, an adviser to industrial countries, on Wednesday cut its 2008 global demand growth forecast by 130,000 bpd to 1.98 million bpd and said it might lower the figure further if a U.S. economic slowdown worsened. Reuters
Source:Trade Arabia
