Oil prices pushed towards $100 a barrel on Friday, recovering some ground after a steep six-day fall as bargain hunters stepped in, although worries about global demand and oversupply kept a lid on the rebound.
Analysts said the market seemed to be stabilising after a week of heavy liquidation, in which prices tumbled from over $106 along with a rout in gold and industrial metals.
"It's probably too early to say if we are out of the woods after such a big sell-off," said Ole Hansen, head of commodity strategy at Saxo Bank. "At the moment it's more a question of establishing some support in the market, and so far that has been reasonably successful."
Brent crude was up 74 cents to $99.87 a barrel by 1116 GMT, off an intraday high of $100.33 a barrel but still extending Thursday's 1.47 percent gain. U.S. crude rose 80 cents to $88.53, but market participants were cautious as to whether the recovery had legs.
"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."
Front-month oil prices are still on course for a fall of more than 3 percent for the 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.
"The latest economic data out of Europe, China and the U.S. was not so good, so it's no wonder demand projections have been revised downwards," said Carsten Fritsch, and oil analyst at Commerzbank in Frankfurt.
"This will lead to even higher physical oversupply in the oil markets, given rising U.S. shale production and constant OPEC supply. In the very short term, I don't see any room for meaningful price recovery unless OPEC cuts supply or we get some better-than-expected economic data."
Data through 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 nearly $10 a barrel from the start of this month. Brent fell to 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 stabilised. "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 Hansen.
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 Florence Tan in Singapore; editing by Jane Baird and Alison Birrane)