Oil prices edged up today, brushing off four consecutive days of losses ahead of weekly US data forecast to show yet another draw in crude stocks, but economic worries remain in the background.
US light crude for February delivery, on its first day as the front-month contract, was up 49 cents at $90.57 a barrel earlier today, after settling 97 cents lower yesterday when oil prices moved within a $4 range.
London Brent crude was up 65 cents at $90.77.
"Sentiment is bearish on the stocks markets, waiting for some further news on credit and subprime turmoil. And there is more room for the euro to correct, which is bearish for crude oil prices," said Marc Lansonneur, managing director commodities derivatives for French bank Societe Generale.
"However, short-term bullish factors could come from tension on US physical stocks, and the situation between Turkey and north Iraq," he added.
Analysts called for an average 1.6 million barrels draw, which would further tighten crude inventories that are already at their lowest since March 2005.
Distillate supplies, which include heating oil, were seen down 500,000 barrels and petrol stocks up 1.0 million barrels in the weekly data that will be released later today.
NYMEX January heating oil took a beating yesterday, settling down 4.25 cents or 1.64 per cent at $2.5554 a gallon.
After a cold start, private weather forecaster AccuWeather expects temperatures in the Northeast, the largest market for heating oil, to mostly average above normal for the rest of the week.
Yesterday oil prices initially jumped more than $2 on news of a Turkish troop incursion into northern Iraq and a strike at French refineries.
But they fell sharply after the government of Iraq's Kurdish region said the Turkish troops had withdrawn and on renewed worries about the US economy.