US oil prices rallied Thursday despite an International Energy Agency report that said the outlook for global crude demand growth has weakened considerably.
US benchmark West Texas Intermediate for October delivery gained $1.16 to close at $92.43 a barrel on the New York Mercantile Exchange. The contract had fallen to $90.43 earlier in the session, its lowest level since May 2013.
European benchmark Brent oil for October delivery finished four cents higher at $98.08 a barrel in London, after earlier dropping to $96.72 a barrel, the lowest point since July 2012.
Gene McGillian, a broker and analyst at Tradition Energy, said some traders decided to take profits after the gap between WTI and Brent closed to less than $5 from $9 a week ago. Trading the difference between the two contracts is a popular bet in the oil market.
"People decided to take some profit," McGillian said.
The International Energy Agency, which advises on energy policy to industrialized nations, slashed its global oil demand outlook, citing weaker economic growth in both Europe and China.
The IEA cut its estimate for oil demand growth this year to 1.0 percent or to 900,000 barrels per day, from a previous estimate of 1 million barrels per day.
That takes total demand for the year to 92.6 million barrels a day.
"The recent slowdown of demand growth is nothing short of remarkable," the agency said.
Analysts said the weak IEA forecast was countered by a revival of concerns about geopolitical tensions after the US and the European Union announced further sanctions on Russia over its actions in Ukraine.
Analysts also cited comments by Russian foreign ministry spokesman Alexander Lukashevich of President Barack Obama's calling announcement to order US airstrikes on Syria "an act of aggression."
"The tensions got raised," said John Kilduff, founding partner of hedge fund Again Capital.
"Maybe the market's gotten a little too blase about the Middle East."