U.S. crude futures steadied around $78 a barrel on Friday after sliding nearly 4 percent in the previous session to an eight-month low on weak economic data from China, the United States and the euro zone along with swelling crude oil supplies.
U.S. crude was trading up 22 cents at $78.42 per barrel by 0003 GMT.
ICE Brent crude for August delivery was up 21 cents at $89.44 a barrel.
The contract had settled in the previous session at $89.23 a barrel, its lowest settlement since December 2010.
Fundamentals
* U.S manufacturing grew at its slowest pace in 11 months in June and the number of Americans filing new applications for unemployment aid fell only slightly last week, further evidence the economy was weakening.
* Business activity across the euro zone shrank for a fifth straight month in June and Chinese manufacturing contracted, while weaker overseas demand slowed U.S. factory growth, surveys showed.
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* Independent auditors said Spanish banks may need up to 62 billion euros in extra capital, to be filled mostly by a euro zone bailout, after Spain's medium-term borrowing costs spiralled to a euro-era record on Thursday.
* The International Monetary Fund urged the euro zone on Thursday to channel aid directly to struggling banks rather than via governments and called for the European Central Bank to cut interest rates, saying the future of the euro was at stake.
MARKET NEWS
* The safe-haven U.S. dollar hovered at 1-1/2 week highs against a basket of major currencies on Friday, staying buoyed following a long-anticipated credit ratings downgrade of the world's major banks by Moody's.
* The euro fell to $1.2547, pulling well away from this week's peak of $1.2748 set on Monday. It came close to testing major support at $1.2520, a low carved out on Monday in reaction to initial Greek exit poll results.
* Gold dropped 2.5 percent and nearly wiped out this year's gains. The metal posted its biggest one-day drop since February 29. It hit a session low of $1,563.88.
* U.S. stocks posted their worst day in three weeks, adding to losses after Goldman Sachs recommended shorting the benchmark S&P 500 index.
* The Dow Jones industrial average dropped 250.82 points, or 1.96 percent, to end at 12,573.57. The Standard & Poor's 500 Index was down 30.18 points, or 2.23 percent, at 1,325.51. The Nasdaq Composite Index was down 71.36 points, or 2.44 percent, at 2,859.09.