LONDON: Oil prices firmed on Wednesday but held under 35 dollars per barrel in New York on the eve of data forecast to show falling US energy demand amid the global economic downturn, analysts said.
New York's main futures contract, light sweet crude for delivery in March, firmed two cents to 34.91 dollars a barrel, after earlier falling as low as 34.43.
Brent North Sea crude for April delivery added 32 cents to 41.35 dollars per barrel, after earlier touching 40.30.
The US Department of Energy will publish its weekly report on American energy inventories on Thursday, one day later than normal because of a public holiday on Monday.
The report is keenly awaited by traders because the United States is the world's biggest energy consuming nation.
"Crude oil traded below 35 dollars a barrel on speculation that US stockpiles climbed ... amid a drop in demand because of the global economic contraction," said BetOnMarkets analyst Dave Evans.
"The price of (New York) crude will probably stay around the 35-dollar level until the inventory report."
Oil had tumbled in value on Tuesday, mirroring steep falls in equity markets, as traders were gripped by energy demand worries in a worldwide economic downturn.
Investors also fretted over the effectiveness of a new US economic stimulus law and the health of the US banking system, while two automakers raced to submit restructuring plans.
Data on manufacturing activity in the New York region deepened the gloom, showing a fall in the Empire State index to another record low in February.
"Crude futures suffered heavy losses (on Tuesday), slipping lower on renewed fears over the global economy," said analyst Andrey Kryuchenkov at VTB Capital in London.
"It was the first trading day in New York after the long holiday weekend and pessimism was overwhelming everything, even increasing calls from OPEC on the possibility of further supply cuts."
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