Oil prices bounced back toward 36 dollars a barrel in New York on Friday ahead of a long holiday weekend in the United States, traders said.
New York's main futures contract, light sweet crude for delivery in March, advanced two dollars to 35.98 dollars a barrel.
Brent North Sea crude for delivery in April fell 45 cents to 45.58 dollars a barrel in London. Brent's March contract expired on Thursday.
The market rebounded in New York on Friday ahead of the Presidents Day weekend. US floor trading will close on Monday for the public holiday.
In earlier trade, however, New York crude risked again touching a five-year low of 32.20 dollars reached on December 18, as large US energy stockpiles weighed on the market.
The price differential between New York crude and London Brent oil also hit a new record, exceeding 11 dollars on Friday, which analysts attributed to soaring energy stockpiles in the United States.
The New York price "has been distorted by the building of inventories, particularly in Cushing," said David Moore, commodity strategist with the Commonwealth Bank of Australia.
Cushing, Oklahoma is the delivery point for crude traded on the New York Mercantile Exchange (Nymex).
The worst global economic crisis since the Great Depression of the 1930s has hurt energy demand and pulled prices down from record highs of above 147 dollars for Brent and New York crude reached last July.
"The current calamity is as real as real gets," said Mike Fitzpatrick of MF Global. "In some quarters it is even being characterised as a depression."
Against the current economic backdrop, "30-dollar oil now seems realistic," he said.
It will take at least two years for crude prices to recover to 70-75 dollars a barrel, Falah al-Amiri, who heads Iraq's oil marketing body, said Thursday.
Crude futures have fallen this week as government data showed surging crude stockpiles amid sagging demand in the United States, the biggest energy-consuming nation.
The US Department of Energy (DoE) said in a report on Wednesday that American crude stockpiles had soared by 4.7 million barrels in the week ending February 6. That was higher than market expectations of a 3.0-million-barrel gain.
The International Energy Agency (IEA) on Wednesday again cut its forecast for global oil demand this year, but warned about a future supply crunch because of current low investment levels.
The energy watchdog for industrialized nations forecast that global oil demand would measure 84.7 million barrels per day (bpd) on average in 2009 -- 570,000 bpd less than its last forecast made in January.
At this level, demand would be 1.1 percent or 1.0 million bpd less than in 2008, when demand also fell compared with the year earlier.
The IEA, echoing warnings from industry insiders and members of Organization of Petroleum Exporting Countries, also warned that one of the effects of low prices would be a delay in investment in future capacity that will be needed once global growth picks up again.
OPEC also trimmed its forecasts for global oil demand, forecasting that it would shrink by 0.67 percent in 2009 because of "economic depression" in industrialised countries.
"World oil demand continues its steep decline from last year and is expected to follow this strong negative pattern at least for the first three quarters of the year," the cartel wrote in its February report.
The secretary general of OPEC, Abdalla Salem El-Badri, said on Monday that members of the cartel had already postponed 35 oil drilling projects because of low crude prices.
He has said that member nations of OPEC, which pumps 40 percent of world crude, needed a price above 50 dollars per barrel for their exports to encourage investment and balance their government budgets.
What are your thoughts CLICK HERE to leave us a "QUESTION OF THE DAY” comment.
© Copyright 2015, A Granite Broadcasting Station. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.