LONDON (Reuters) - Oil edged up to around $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 OPEC to consider holding talks to review output.
U.S. light crude for November delivery was 25 cents up at $89.20 a barrel by 7:49 a.m. EDT. On Wednesday oil hit a 10-month low of $86.05.
London Brent crude was up 13 cents at $84.49 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 said OPEC is calling for an extraordinary meeting. Some members of the Organization of the Petroleum Exporting Countries have said the group should meet in November to discuss the impact of the financial crisis.
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 cartel 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 United States 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 problems in the banking sector.
Central banks around the world have cut interest rates to try to ease the strains on the financial system and the United States may consider taking stakes in debt-laden banks.
Asian and European shares firmed and gold, a traditional safe-haven investment, slipped back, suggesting government action may have begun to have some impact on investor sentiment.
(Reporting by Jane Merriman in London and Annika Breidthardt in Singapore)
