AFP reported that oil prices rose slightly extending their recovery after heavy falls over eurozone debt tensions as the market eyed demand concerns and awaited key US energy inventory data.

Analysts said that New York's main contract, West Texas Intermediate for delivery in August gained 13 cents to USD 97.56 per barrel. Brent North Sea crude for August nudged up 4 cents to USD 117.79 in London late morning deals. Oil prices rebounded on Tuesday, one day after sliding on growing market concerns about the eurozone debt crisis and a weak US jobs market.

Mr Carsten Fritsch analyst of Commerzbank said that "Oil prices continue to show remarkable relative strength. The softer US dollar and incipient speculation on further monetary policy easing by the Fed are providing further stimulus after prices were already considerably higher in later trading yesterday. Prices were also winning support thanks to tight supply concerns.”

The IEA warned that the oil market still needs more supplies for the third quarter of the year despite an official stock release and increased OPEC production. Major producers have recognized that demand for their oil is rising as economic growth and short term fuel substitution keep global and emerging market demand growth robust. We welcome rising OPEC volumes seen in June but the market needs still more oil.

OPEC held broadly steady its forecast for oil demand this year and forecast steady demand growth next year, saying that the strength of economic recovery was unclear. Demand for oil this year would be 88.18 million barrels per day an increase of 1.36 million barrels per day from the level in 2010.

OPEC members supply more than one third of global crude oil and hold more than three quarters of reserves. The oil market was meanwhile awaiting a weekly snapshot of energy inventories in the United States which is the world's biggest consumer of crude oil.

(Sourced from AFP)