LONDON -- Brent crude oil rose more than a dollar to around $87 a barrel on Friday, bouncing from near four-year lows as investors bought back into a market they said was oversold, and as fighting in Iraq increased political risk.
Oil has lost more than a fifth of its value since June on heavy oversupply, signs of weak demand growth and indications that key oil producers, particularly Saudi Arabia, have a limited appetite to intervene on prices.
"Prices have likely overshot to the downside," said Jeffrey Currie, head of oil analysis at Goldman Sachs. "This leaves us near-term constructive despite being bearish as we look further out."
The oil sell-off had been driven by "expected fundamental shifts as opposed to currently observable shifts," Currie and his colleagues said in a note to clients.
Brent for December rose $1.52 to a high of $87.34, before slipping back to around $86.80 a barrel by 1210 GMT, but was still on track for its fourth weekly loss in a row. The November Brent contract expired on Thursday.
U.S. November crude, heading for its third weekly decline, was up $1.05 at $83.75.
"We see prices averaging around $85 in 2015, so we have been advising customers to hedge when 2015 prices approach that level," said Bjarne Schieldrop, chief commodity analyst at SEB in Oslo.
Developments in Iraq also supported prices, as Islamic State fighters showed their strength despite an extensive air campaign by the United States and other Western and regional powers.
