Brent crude oil prices closed below $100 a barrel on a second day of modest gains on Friday, after surpassing $100 earlier in the session and recovering some ground after a steep six-day decline.
Brent has fallen nearly 10 percent since the beginning of April, a decline that accelerated earlier this week after a cut in oil demand forecasts by global energy agencies and weak economic data from the United States and China, the world's two largest oil consumers.
Friday marked the second day of gains for Brent after it closed at $97.69 on Wednesday, the lowest level since July 2012 and a price that analysts said was attractive to bargain hunters.
Analysts said the market seemed to be stabilizing after a week of heavy liquidation in which prices tumbled from over $103 as of last Friday, along with a rout in gold and industrial metals.
"Today's gains looked like a follow-up to yesterday's correction and one that could possibly be maintained for a couple more sessions," Jim Ritterbusch, president at Ritterbusch and Associates in Galena, Illinois, wrote in a research note.
Brent crude settled up 52 cents a barrel at $99.65, down from an intraday high of $100.33. U.S. crude gained 28 cents to settle at $88.01.
The May U.S. crude contract expires Monday, April 22.
Most U.S. stocks rose on Friday, taking the oil complex with them. U.S. equities back a day after the S&P 500 closed below its 50-day moving average for the first time this year, with help from some blue-chip tech names.
"This remains a market very much driven by the equity markets. They've been rebounding and we're just knocking along with that," said Kyle Cooper, managing director of research at IAF Advisors in Houston, Texas.
"Crude inventories are at an all-time high, but we're up today," he added. "There are some people who want to believe it's a physical market, but it's not. It's a financial market."
Yet worries about global demand and oversupply persist, and market participants remained cautious as to whether the recovery had legs. Front-month oil prices have fallen more than 3 percent for the week.
"Oil prices were technically oversold so we are seeing some buyers coming in but they are not great volumes," said Rob Montefusco, an oil broker at Sucden Financial in London. "There is nothing to suggest we can go up on a sustained basis - we were just overdone on the downside."
After spending the week below 30 on the relative strength index (RSI), a technical momentum indicator, Brent crude poked its head above 30 on Friday.
A reading of 30 or below indicates an oversold condition to chart-watching traders.
Data released during the week contributed to falling prices. Chinese first-quarter GDP growth was seen as disappointing, down at 7.7 percent from 7.9 percent in the fourth quarter. In the United States, the number of people filing new claims for unemployment benefits rose last week, and factory activity in the nation's mid-Atlantic region cooled in April.
Oil prices are down more than $10 a barrel from the start of this month. Brent touched its lowest level since July 2012 on Thursday at $96.75 a barrel after commodities took a hammering across the board earlier in the week.
Earlier in the week gold suffered its worst two-day fall in 30 years. Copper is still down below $7,000 a tonne, on course for its worst week since 2011.
But with the exception of industrial metals, the complex now appears to have stabilized. "There is a general feeling in the market that Brent won't go much below $100 at this stage as a lot of speculative length has now been liquidated," said Ole Hansen, head of commodity strategy at Saxo Bank.
The $100 level is seen as critical, because it is a budget breakeven point for OPEC members such as Iran, Iraq and Algeria.
"OPEC doesn't want to see the price fall much below $100, and given that they continue to produce at very high levels, they can just turn the taps down a little bit, which would quickly change the balance in the market," Hansen said.
Iran and Venezuela have already raised concerns about the price fall and said discussions had taken place over whether to call an emergency OPEC meeting before the group's scheduled meeting at the end of May. (Additional reporting by Robert Gibbons in New York, Claire Milhench in London and Florence Tan in Singapore; Editing by Marguerita Choy, James Dalgleish and Andrew Hay)