FRANKFURT (MarketWatch) -- Crude-oil futures rose above $66 a barrel on Friday, rebounding modestly after tumbling to two-month lows in the previous session.
Crude for November delivery gained 42 cents, or 0.6%, to $66.31 a barrel in electronic trading on Globex.
The contract, which earlier rose to an intraday high of $66.70, had tumbled 4.5% on Thursday to finish at the lowest level seen in nearly two months. The decline followed on a steep sell-off in Wednesday's session as the government reported a rise in U.S. petroleum inventories.
Thursday's selling came "amid questions about the underlying strength in overall commodity demand," said Edward Meir, an analyst at MF Global, in a note to clients.
"With almost $6 in losses in crude oil over the past two days, there has been a marked deterioration in many of the energy charts," Meir said in a note to clients.
However, analysts at Goldman Sachs raised their forecasts for global oil demand for the fourth quarter of 2009 and for 2010 by 1.2 million barrels a day and 1.6 million barrels a day, respectively.
"The permanent damage from the credit crisis is much less than we had previously thought, which means that we are beginning the recovery from a higher base," wrote Jeffrey Currie and other Goldman analysts in a research note.
At the same time, Goldman maintained its price forecasts, saying that higher anticipated demand has been met by stronger supply, particularly out of Russia and the rest of the former Soviet Union.
As a result, Goldman raised its global supply forecasts by an amount similar to its global demand forecast.
Goldman kept its end-of-2009 price target for West Texas Intermediate crude at $85 a barrel, along with an average 2010 price forecast of $90 a barrel and its end-of-2010 target of $95 a barrel.
