Brent crude has risen above USD 107 this morning, recovering from yesterday’s losses, as potential strong winter fuel demand and turmoil in the Middle East offset fears that a global economic slowdown could hurt consumption.

Crude stockpiles in the United States fell more than expected last week as refinery rates rose and crude imports fell. A botched German bond sale yesterday raised alarm that the crisis could hit even Europe’s largest economy.

ICE January Brent futures has risen 63c to USD 107.65 a barrel.

Brent is poised for a third year of gains because of the political turmoil in the Middle East.

US January crude, set for its second week of decline, is up 37c at USD 96.55 a barrel.

Trading volume is expected to remain thin as the United States is closed for the Thanksgiving holiday.

Both contracts had lost nearly 2pc yesterday as weak economic data from Europe, China and the United States painted a somber outlook for global oil demand.

Tony Nunan, a risk manager at Mitsubishi Corp, said winter and the uncertainty in the Middle East would support the market in the short term.

"OECD inventories are so low and we’re running into winter," he said. "Seasonally December is the highest demand period."

US crude inventories fell 6.22m barrels last week, against an expected increase of 500,000 barrels, data from US Energy Information showed.