Oil prices drifted on Friday as the market digested predictions of flagging growth in world demand from the West's energy watchdog, the International Energy Agency.
Benchmark Brent crude stood US$0.05 up at US$25.05 a barrel as the market recovered from a day low of US$24.94 following the release of the IEA report.
Brent had lost around US$1.70 this week. US light crude, which has fallen about US$1.30 since last Friday, gained three to US$26.83 a barrel.
The IEA, the Paris-based energy arm of the Organization for Economic Cooperation and Development, said world oil demand growth was faltering badly under the weight of low industrial output and feeble consumer demand.
The agency sliced in half its forecast for incremental petroleum demand this year and said high oil prices were partly to blame for the downturn in the global economy.
"After modest growth in the first half of this year, world demand for petroleum products appears set to contract slightly in the third quarter, down 0.2 percent from the same period last year, as the global economic slowdown continues," the IEA said in its monthly oil market report.
It cut its projection for demand growth this year by 510,000 barrels per day to just 460,000 bpd, projecting world petroleum consumption at 76 million bpd.
It was the IEA's seventh downward revision to an original demand growth projection for 2001 of 1.86 million bpd.
Crude has lost ground all week on signs fuel usage in the biggest energy market, the US, is slowing. High gasoline prices have led US drivers to scale back summer vacation plans and economic woes are shackling demand from industrial users.
Iraq's return this week as a crude exporter after a five-week break also knocked prices down with overall supplies appearing adequate for the time being.
The head of the OPEC producers' cartel said on Friday that global fuel inventories were in good shape and there was enough crude to meet consumer demand.
"There's plenty of oil ... consumers are receiving plenty of oil," OPEC President Chakib Khelil said.
Khelil, who is also Algerian oil minister, rejected EIA predictions last week that oil stocks across industrialised nations would be at a 70-million-barrel deficit by the end of the northern hemisphere summer.
"There's no tight [supply] market, so why is there any concern?" he said.
OPEC decided earlier this month to leave unchanged its production ceiling of 24.2 million bpd.
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