Oil rebounded as much as $1 in overnight trading after two days of a small price dip.
US crude for December delivery rose as much as $1.02 cents to $96.48 a barrel in electronic trading, reversing the previous day's 91-cent drop. It fell back slightly to $96.35 as the London market opened.
Oil fell for a second day on Thursday after US Federal Reserve Chairman Ben Bernanke highlighted the twin threats of slower growth and inflation for the US economy, spurring profit-taking that pulled oil further back from a record $98.62.
But Wall Street curbed late losses and the dollar hit yet another low against the euro today, maintaining the attractiveness of oil for investors and speculators.
The closure of 540,000 barrels of oil equivalent per day of production in the North Sea due to an approaching storm coupled with a weeks-long outage at a diesel refinery unit in Texas added a fundamental element to the gains.
Worrying signals from the US economy suggest lower demand for oil from the world's biggest consumer, where average consumption over the past four weeks fell about 0.4 per cent from a year ago, according to government data this week.