World oil prices drifted higher on Friday as traders digested signals of a US economic slowdown that could reduce demand and tightening supply ahead of the looming northern hemisphere winter.
New York's main contract, light sweet crude for December delivery, closed at US$96.32 a barrel, up US$0.86 from Thursday.
In London, Brent North Sea crude for December delivery gained US$0.39 to settle at US$93.18.
The market paused after prices rose this week to record peaks on Wednesday: US$98.62 in New York and US$95.19 in London.
Friday's modest price gains followed a retreat Thursday after US Federal Reserve Chairman Ben Bernanke underscored increasing downside risks to growth in the world's largest economy, prompting traders to scale back the outlook for demand.
"While the supply outlook and weak dollar remain quite bullish to oil, the market is also facing economic headwinds which will probably cause increased volatility rather than the vertical climb seen over the last two weeks," said Michael Fitzpatrick, analyst at MF Global.
"With economic uncertainties beginning to crop up again, it will not be surprising to see a break before the market eventually makes the inexorable push above the US$100-a-barrel level," Fitzpatrick said.
Sucden analyst Michael Davies said in London that "market participants worry that a further slowdown in US economic growth could dent demand for energy in the world's top consumer."
"It seems that at the moment investors are focusing on this short-term outlook for the US economy, even though in the longer term global oil demand is still seen outpacing supply," he said.
Lehman Brothers analysts forecast oil prices could hit the psychological US$100 level early next week.
"Next week could be one of the most volatile weeks for oil in years" because of technical factors such as the expiration of the New York futures contract Friday, the Lehman analysts said in a note to clients.
"The market may be set up to test US$100 by Tuesday. It also appears poised to sell off -- perhaps strongly -- soon afterward," they said.
Oil prices were supported this week by supply worries, including the closure of oil platforms the Norwegian coast owing to storms in the North Sea. Norway is the world's fifth-largest exporter of crude.