Oil prices levelled off this evening on signs that the US and other countries could soon release some emergency reserves to keep prices from rising.
US crude was up 52 cents to $103.30 a barrel, having dived $2.63 on Thursday. In London, Brent crude was up 85 cents at $123.24.
French Prime Minister Francois Fillon said yesterday there was a "good chance" that the US and Europe would agree to release some of their oil reserves. Investors are considering how much the additional supply would lower oil prices.
Some analysts expect crude has peaked for the year as slower global economic growth undermines demand for oil.
"I will say, as I have said repeatedly, that this option is on the table, but no decisions have been made and no specific actions have been proposed,'' White House spokesman Jay Carney had said yesterday.
Also this week, France's Energy Minister Eric Besson gave the clearest indication so far that his country was ready to release some of its reserves. It marked an evolution of France's position.
Last week, Besson said that Paris was merely studying the possibility of opening its reserves as "one of the options" to tame oil prices. In theory, a nation's reserves are held in case of a major international crisis like a war or a natural disaster in an oil producing area.
But Asia's fuel-hungry economies are once more gathering steam, pushing up prices at a time when the economic recovery remains more vulnerable in some western economies.
The International Energy Agency, which coordinates an emergency release of strategic reserves by its 28 member countries, said today that it was closely monitoring market developments.
Oil prices also fell this week on data showing that US crude inventories rose by the biggest amount in 20 months last week, and on repeated Saudi Arabian pledges to ensure adequate supplies amid a drop in Iran crude exports.
The market remains supported by wariness over a possible supply crunch brought on by Western sanctions on Iran. Output from one of OPEC's biggest producers has shrunk considerably on the back of sanctions from the US and its Western allies, who believe that Tehran is working towards nuclear weapons capability despite its denials.
