LONDON (AFP) — Oil prices steadied Thursday, finding some support after recent steep falls despite news of the first weekly rise in US crude inventories since November.
New York's main contract, light sweet crude for delivery in February, eased three cents to 90.81 dollars per barrel.
Brent North Sea crude for March firmed 42 cents to 89.92 dollars.
Prices had fallen sharply on Wednesday in reaction to higher US crude reserves and after US President George W. Bush called on OPEC members to hike output, traders said.
"It seems that the market is pausing after a heavy sell-off in the past two days and digesting the latest US stockpile figures," said Sucden analyst Andrey Kryuchenkov in London.
The US Department of Energy said Wednesday that crude inventories rose by 4.3 million barrels in the week ending January 11. That was far more than analysts' predictions for a rise of 1.3 million barrels.
Oil had already been heading lower before publication of the DoE report, dampened by fears that a slowdown in the US economy could cut demand.
Prices remain at high levels but have shed about 10 dollars since striking a record in New York of 100.09 dollars per barrel earlier this month.
"At the moment it seems that economic concerns continue to outweigh all these factors that drove crude prices to just above 100 dollars," Kryuchenkov added.
"All the aspects that underpinned crude prices in 2007 and at the start of this year are still here, with tight supplies, geopolitical fears on the supply side and the broad weakness in the greenback.
"However, we fear that until global economic jitters and concerns over the US economy settle down, trade is likely to remain volatile with less emphasis on actual supply fundamentals."
Traders are also now looking ahead to OPEC's output meeting in Vienna on February 1.
OPEC Secretary General Abdullah al-Badri told AFP on Wednesday that high prices were not caused by a shortage of oil and that other factors were to blame.
Stressing that the organisation saw no shortages, he said OPEC would be prepared to increase production if it saw evidence that supply and demand were out of balance.
"Let me be clear, the high prices which we are witnessing are not because of any shortage of crude oil in the market," he said in an email reply to questions submitted by AFP.
On a tour of the Middle East, US President George W. Bush raised the issue of high oil prices during his talks with King Abdullah of Saudi Arabia, whose country is the world's top crude producer and the most influential OPEC member.
Also on Wednesday, the International Energy Agency kept its 2008 forecast for oil demand unchanged despite growing expectations of a US recession which would be expected to curb demand.
Before the OPEC meeting, traders predict steadier trade heading into the Martin Luther King US holiday on Monday.
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