Oil was higher in Asian trade today 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 42 cents to $88.12 a barrel.
Brent North Sea crude for February delivery advanced 39 cents to $91.99 a barrel. The January contract, which expired yesterday, settled at $91.71.
Signs of improved demand were reinforced by the latest Department of Energy's (DoE) weekly report that 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," they said.
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.
