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London: Oil was near $89 on Thursday after a steep slide this week in response to expectations that demand will fall sharply if the global economy slides into recession.
The sharp fall in prices has prompted the Organisation of Petroleum Exporting Countries (Opec) to consider holding talks to review output.
US light crude for Nov-ember delivery was 10 cents up at $89.05 a barrel by 1320 GMT. On Wednesday oil hit a 10-month low of $86.05.
London Brent crude was up 26 cents at $84.62 a barrel.
Oil has dropped about 40 percent from a peak of $147.27 a barrel in July and reached its lowest in 10 months earlier this week.
Venezuelan President Hugo Chavez has said Opec is calling for an extraordinary meeting and some other members of the Opec have said the group should meet in November to discuss the impact of the financial crisis.
"Opec members will have an emergency meeting to review oil market conditions in mid-November in Vienna," Iran's oil minister Gholamhossein Nozari told official IRNA news agency.
Nigeria, Qatar and Iraq, all members of the group, on Wednesday floated the idea of a cut in output.
"It will be interesting to see how the group juggles things in a down market," said Edward Meir of broker MF Global.
"Much will ride on the Saudis and whether they will agree to restrain their massive production," he said. "We suspect they will resist sharp cutbacks."
A much larger than expected rise in crude and gasoline inventories last week in top energy consumer the US provided evidence that demand is slowing as the credit crisis starts to affect the wider economy.
The International Monetary Fund has warned that the world economy is set for a major downturn after the banking sector woes.
Gold falls
Gold slipped on Thursday as investors cashed in gains that took the metal to a nine-day high in the previous session, with a recovery in equity markets attracting investment back to stocks.
Platinum climbed, however, mirroring a recovery in many industrial metals, as a steadier outlook for the financial sector relieved downward pressure on the metal.
Spot gold was quoted at $887.60/$890.10 at 1329 GMT, down from $906.50 in late New York trade on Wednesday. Earlier it touched a session low of $877.65.
"There are still a lot of speculative positions in the market and some banks are taking profit to make up losses on other markets," Commerzbank senior trader Michael Kempinski said.
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