| Updated at: 1250 PST, Friday, December 17, 2010|
SINGAPORE: Oil was higher in Asian trade Friday amid expectations that crude demand will stay strong heading into next year, analysts said.
New York's main contract, light sweet crude for January delivery, gained 52 cents to 88.22 dollars a barrel. Brent North Sea crude for February advanced 34 cents to 91.94 dollars a barrel.
The January contract, which expired Thursday, settled at 91.71 dollars. Signs of improved demand were reinforced by the latest Department of Energy (DoE) weekly report, which showed US crude reserves sank a massive 9.9 million barrels in the week to December 10 -- the biggest weekly drop in eight years. The United States is the world's biggest oil consumer.
"Buoyed by a positive set of DoE statistics, oil prices consolidated further in their current range," analysts from Barclays Capital said in a report. "The latest weekly data were extremely constructive all around." However, fears about Europe's economy as the region struggled to contain sovereign debt problems could cast a shadow on crude markets if the situation deteriorates.
"The market will be focused on Europe as it fears that another crisis may send the euro lower and the dollar higher, taking away the desire to be long crude and other commodities," said Phil Flynn of PFG Best. "For traders though, all of this angst is a good thing as it is providing some wide trading ranges and which gives ample opportunities," he said.