Oil prices climbed to $93 a barrel Friday, making a muted rebound from big losses in the past week as indicators point to a weak global economy.
By early afternoon in Europe, benchmark crude was up 69 cents at $93.11 a barrel in electronic trading on the New York Mercantile Exchange. Before today's rise, oil had fallen 7 percent since last Friday, when the price briefly topped $100 per barrel for the first time in 4 months. The sharp drop was expected and overdue, many analysts say.
Traders had driven oil prices up by 30 percent since late June in anticipation of new measures from the world's central banks to boost economic growth. This week they woke up to some cold hard facts: there's no easy fix for the global economy, demand for oil is slowing and there's plenty of supply.
Economies around the world are struggling, including the three biggest oil-consuming regions: the U.S., China and Europe. When economic growth falters, demand for gasoline, diesel and jet fuel falls as people travel less and ship fewer goods.
At the same time, world oil supplies are plentiful. Production in the U.S., Canada, Iraq and Saudi Arabia has increased enough to make up for losses from Iran, Venezuela and elsewhere. The U.S. government reported this week that stocks of oil grew by 8.5 million barrels to 367.6 million barrels, which is 8.4 percent higher than last year.
Some concerns about production outages in Libya and the North Sea were mentioned by experts as a possible — albeit temporary — cause for the rebounding oil prices.
"However, while focusing on supply risks generally does offer reason enough for recovering prices, the currently flagging global economy may take the wind out of the sails of any such movement," said a report from analysts at Commerzbank in Frankfurt.
In London, Brent crude was up 73 cents at $110.76 a barrel on the ICE Futures exchange.
In other Nymex energy futures trading, wholesale gasoline rose 2.5 cents to $2.8059 a gallon and heating oil added 1.55 cents to $3.1085 a gallon. Natural gas gained 2.3 cent to $2.819 per 1,000 cubic feet.