Oil held steady over $95 a barrel Friday after a series of bleak reports hit the economic outlook for top energy consumer the United States, helping erase earlier gains on supply concerns.
The reports showed the mood of American consumers deteriorating in February to a point that has always signaled recession.
U.S. data also suggested bubbling price pressures, raising the possibility of a troublesome scenario of simultaneously slowing growth and rising inflation -- "stagflation."
U.S. crude settled up 4 cents at $95.50 a barrel as profit-taking helped knock crude off a one-month high of $96.67 earlier in the session. London Brent crude tumbled 53 cents to settle at $94.63 a barrel.
"It looks like some profit taking today even though this week's action has shown we are back in a bull market," said Peter Beutel, president of Cameron Hanover Worries about the U.S. economy helped push oil off a record over $100 struck in early January, but the escalating row between OPEC member Venezuela and oil major Exxon Mobil over the nationalization of a giant oil project supported prices earlier this week.
The South American country, one of the largest crude exporters to the United States, cut shipments to Exxon Mobil this week after the U.S. oil major won court orders to freeze over $12 billion of Venezuela's assets.
Venezuelan President Hugo Chavez, a critic of President Bush, imposed the embargo on Exxon after threatening to cut off all shipments to the United States in the row over nationalization of Exxon assets in Venezuela.
The head of the International Energy Agency said the impact of the cut off crude oil exports would likely be "very limited" and probably will not necessitate releasing global emergency crude oil stockpiles.
"We don't see very much serious needs for stockpile releases in this case," IEA Executive Director Nobuo Tanaka told reporters.
U.S. Energy Secretary Sam Bodman said Thursday he did not expect Exxon to have trouble replacing oil supplies from Venezuela, but said the nation's Strategic Petroleum Reserve would be available if needed.
Major oil producers in the Middle East have already assured the United States they could compensate for a supply disruption if Venezuela slows exports.
Separately, OPEC said its current oil output of some 32 million barrels per day should be enough to meet growing demand and boost global stocks, a possible sign that it may decide to keep supplies steady at its March 5 meeting.
"If that is the way they see (the market), then it seems unlikely they will increase or decrease production. Steady is the most likely outcome," said Kevin Norrish, energy analyst at Barclays Capital.
OPEC projected world demand would increase by 1.23 million bpd, down 70,000 bpd from its January forecast.