Oil hovers below $84

NEW YORK (AP) – Oil prices recovered slightly on Friday after dipping earlier in the day on growing concerns about Europe’s debt crisis.

Benchmark oil for January delivery fell 10 cents to $83.76 per barrel. Prices had dipped below $83 earlier as traders focused on debt woes in Europe.

Portugal’s parliament approved a debt-reduction package and Ireland’s banks suffered a string of credit downgrades. Investors are worried that the pain will spread to Spain, the continent’s fourth-largest economy, and threaten the 16-nation euro.

Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill., said the recovery in oil prices as the day went on “was pretty impressive given the two-month lows on the euro, and the selling on the stock market. That’s telling us that fundamentals are gradually improving” for oil, he said.

Recent economic news has been coming in better than expected, including Wednesday’s consumer sentiment and jobless numbers.

“They’re all developing into the mix here to conjure up ideas of stronger oil demand down the road,” he said.

China’s energy consumption has led growth in global oil demand this year, but investors are worried that recent measures aimed at containing inflation will undermine its economic expansion.

China’s gross domestic product growth, which has averaged about 10 percent a year for the last five years, will likely slow next year to between eight percent and nine percent, Capital Economics said in a report.

In other Nymex trading, heating oil was about flat at $2.32 a gallon. Natural gas rose 1.1 cents to $4.399 per 1,000 cubic feet.

In London, Brent crude dropped 30 cents to $85.80 a barrel on the ICE Futures exchange.