Oil rebounded this morning after falling nearly 3 per cent a day earlier as the threat of a recession in the United States haunted traders.
US oil rose 55 cents to $95.64 a barrel earlier this morning, recouping some of its $2.82 drop yesterday, a third day of losses after prices hit the $100 mark for the first time last week. London Brent crude rose 62 cents to $95.01.
The retreat in prices came after a US report last week showed the nation's unemployment rate rose to 5 per cent in December, its highest in more than two years.
Fuelling bearish sentiment, warmer temperatures have been forecast in the US northeast, the nation's biggest heating oil market, and is expected to depress demand to 40 per cent below normal levels, the National Weather Service said.
US crude oil stocks were expected to have dipped by 900,000 barrels last week, an eighth consecutive draw, pulling them even further below 300 million barrels, a Reuters poll of analysts found.
The poll also showed a likely 300,000-barrel gain in distillate supplies, and a 2.1 million-barrel gasoline build.