Oil recovered more than $2 a barrel to rise above $44 today after an overnight slump by 4 per cent on grim forecasts of lower US demand.
The market is looking to Wednesday's weekly US inventory report that may show rising crude stocks, and then to Opec's December 17th meeting where the group is expected to cut more output.
US crude for January delivery rose $2.28 to $44.35 a barrel this morning. Yesterday, oil fell $1.64, or 3.75 percent, to settle near a four-year low of $42.07 a barrel.
London Brent crude was up $2.00 at $43.53.
Analysts said petrol pump purchase data in the United States today showed its first year-on-year increase since April, with sales up 0.3 per cent in the week ending December 5th.
"We can't really talk about 'demand destruction' in the US anymore," said Olivier Jacob, an analyst at Petromatrix.
The Mastercard data is an estimate based of gasoline pump sales and differs from the US Department of Energy's weekly demand data, which is an implied estimate at loading terminals.
The US Energy Information Administration (EIA) yesterday said it expected global oil demand to fall 50,000 barrels per day in 2008 and 450,000 bpd in 2009, marking the first drop in world oil demand year-to-year since 1983.
The lower forecast came as EIA revised its 2009 world GDP growth estimate down to 0.5 per cent from 1.8 per cent last month.
Reuters