Oil prices rose slightly to near $106 a barrel Friday in Asia after the U.S. denied reports it and Britain plan to release some their strategic crude reserves.
Benchmark oil for April delivery was up 40 cents to $105.51 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 32 cents to settle at $105.11 per barrel in New York on Thursday.
Brent crude for May delivery was up 55 cents at $123.15 per barrel in London.
Oil briefly dropped near $104 per barrel Thursday after reports said the U.S. and Britain had agreed to release spare supplies of oil in an effort to drive fuel prices lower. However, White House press secretary Jay Carney said there was no plan to release supplies.
Some analysts downplayed how much a possible release of supplies would lower prices.
"The price impact should a release actually develop would be largely psychological," energy analyst Ritterbusch and Associates said in a report. "A shortage of crude or products does not currently exist within the U.S. and European product markets appear adequately supplied."
Oil prices have risen from $75 in October amid investor optimism an improving U.S. economy will boost crude demand. However, the Energy Department's Energy Information Administration said Wednesday that gasoline demand was down 7.2 percent from a year ago.
"Despite an array of pleasing economic data in recent weeks, the latest surge in the price of oil can hardly be justified from a fundamental standpoint," said Joerg Zeuner, chief economist at VP Bank. "The demand for crude remains relatively weak."
In other energy trading, heating oil was up 1 cent at $3.23 per gallon and gasoline futures gained 0.2 cent at $3.29 per gallon. Natural gas slid 1.4 cents at $2.27 per 1,000 cubic feet.