Oil prices extend recovery

Oil prices rose slightly on Wednesday, extending their recovery after heavy falls over eurozone debt tensions, as the market eyed demand concerns and awaited key US energy inventory data, analysts said. New York's main contract, West Texas Intermediate for delivery in August, gained 13 cents to $97.56 a barrel. Brent North Sea crude for August nudged up four cents to $117.79 in London late morning deals. Oil prices rebounded on Tuesday, one day after sliding on growing market concerns about the eurozone debt crisis and a weak US jobs market. "Oil prices continue to show remarkable relative strength," said Commerzbank analyst Carsten Fritsch. "The softer US dollar and incipient speculation on further monetary policy easing by the Fed are providing further stimulus after prices were already considerably higher in later trading yesterday." Prices were also winning support thanks to tight supply concerns. The oil market still needs more supplies for the third quarter of the year, the IEA warned on Wednesday, despite an official stock release and increased OPEC production. "Major producers have recognised that demand for their oil is rising... as economic growth and short-term fuel substitution keep global and emerging market demand growth robust," the International Energy Agency said in a monthly report. "We welcome rising OPEC volumes seen in June, but the market needs still more oil," the agency said. The Organization of Petroleum Exporting Countries (OPEC) on Tuesday held broadly steady its forecast for oil demand this year and forecast steady demand growth next year, saying that the strength of economic recovery was unclear. Demand for oil this year would be 88.18 million barrels per day, an increase of 1.36 mbd from the level in 2010, OPEC said in its monthly report. OPEC members supply more than one third of global crude oil and hold more than three quarters of reserves. The oil market was meanwhile awaiting a weekly snapshot of energy inventories in the United States, which is the world's biggest consumer of crude oil. Ahead of the data, on Tuesday, the privately-run American Petroleum Institute said that crude inventories increased for the first time in six weeks, by 2.3 million barrels to 359.4 million.