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Oil rose more than US$2 ($2.60) after a report showing a jump in US personal spending relieved some concerns about the economic health of the world's top oil consumer.
US personal spending increased a bigger-than-expected 1.1 per cent last month, the sharpest gains in more than two years, a Commerce Department report showed last week.
"The US personal spending numbers will alleviate some of the concerns regarding the US economy and are providing the impetus," said Nauman Barakat, senior vice-president at Macquarie Futures USA.
US crude settled up US$2.25 at US$93.31 a barrel on Friday (US time), while London Brent crude gained US$1.58 to US$92.46.
Stock market gains and a slide in the dollar against the euro also supported crude.
US crude stockpiles hit the lowest in nearly three years, according to Government data released on Thursday. Heating fuel stocks in independent storage in Europe's Amsterdam-Rotterdam-Antwerp hub also fell from the period a year earlier.
Trade was thin in the oil market as many participants have squared their books before the holiday period and analysts said the drop in volume could make for volatile prices.
"If anything does happen, the market is going to be very jumpy," said Mike Wittner of Societe Generale.
Oil has retreated from a record high of US$99.29 late last month on signs that a slowing US economy is undermining oil demand. Supply restraint by Opec and falling stockpiles have helped to limit losses.
A Reuters poll showed analysts expect oil prices to average over US$77 a barrel next year, up from an average of US$71.76 for 2007 so far, as tight Opec supplies and Middle East tensions outweigh concerns about a slowing US economy.
- REUTERS
