US oil prices edged up, bouncing on expectations demand will firm after sliding sharply from a 25-month peak last week.
In addition to a bounce after Friday's slide, analysts cited supportive news on Japan's third-quarter growth and strong U.S. gasoline futures amid tight stocks in the New York area as factors lifting the oil complex.
But the dollar's strength and caution about a possible interest rate hike in China to cool inflation helped curb the rise by crude oil prices, analysts said.
US crude for December delivery rose 30 cents to $85.18 a barrel.
In London Brent crude rose 48 cents to $86.82 a barrel.
Meanwhile, the IEA on Friday raised its 2010 oil demand growth forecast by 190,000 bpd to 2.34 million bpd from its previous monthly report on stronger demand in both China and industrialised economies.
Better consumption has prompted a drawdown in oil stocks held on tankers at sea and is now starting to eat into inventories on land.
Analysts said they expect oil prices to now stabilise at near $85 a barrel, leaving levels significantly above the range between $70-$80 where they have mostly traded for the past year.
