Oil rose today to hold firm above $75 a barrel as traders bet that fears of tight summer supplies would offset a fresh wave of risk aversion that struck US equities.
London Brent crude gained 22 cents to $75.40 a barrel earlier this morning after ending $1.14 lower on yesterday. US crude rose 25 cents to $75.20, after a loss of 93 cents the previous day, when it rallied more than $1 mid-session to trade at a premium to Brent.
Traders saw an opportunity to buy after yesterday's dip, felt across commodity markets, which came as weak US housing data revived worries about the economy of the world's biggest oil consumer and sparked a flight from risky assets.
Oil's revival came despite a fall in Asian shares on Friday, which tracked losses on Wall Street where the blue-chip Dow Jones industrial index fell 2.3 per cent in its worst drop since the last global sell-off in late February.
Despite concerns of the potential for weaker US demand, government inventory data on Wednesday showed a third-straight draw in US crude stocks.
Sentiment over global tight supply prevailed as Opec's oil output curbs could ensure a continuing decline in US crude stocks through the third quarter, analysts said.
Exports from Opec-producer Nigeria, which has been plagued by militant attacks on oil infrastructure, are expected to fall 110,000 barrels per day to around two million bpd in September, traders said.