Crude was still heading for its first weekly drop in five weeks, pressured by a big rise in USA inventories and fading concerns that looming US sanctions on Iran will cut supplies significantly.
Global benchmark Brent crude rose 76 cents to $81.02 a barrel by 0830 GMT, having dropped by 3.4 percent on Thursday.
That means the world's three top producers, Russia, the United States and Saudi Arabia, now all churn out around 11 million bpd, meeting a third of global demand.
They were moving in step with a two-day selloff across global stock markets a move that raised concerns about economic resiliency and eventual energy consumption.
Oil pared a weekly loss as investor focus shifted from broader market turmoil spurred by a plunge in US equities and returned to looming shortages from Iran's dwindling exports.
McTeague says there are a number of other factors also driving down prices, including a large refinery shut down in the USA that usually buys a lot of Canadian crude.
Prices headed for a 3.5 percent weekly drop, the most since July.
Specifically, the agency cut its forecast of global oil demand growth by 0.11 million barrels per day (bpd) for 2018 and 2019 to 1.28 million bpd and 1.36 million bpd respectively.
"The market absorbed some effects of sanctions on Iran and the oil prices are more likely to go up 120 to 130 US dollars per barrel, that require the export from Iran would go much lower, " said Richard Nephew, senior research scholar with Center on Global Energy Policy of Columbia University.
At the heart of this softening oil demand backdrop are a myriad of downward pressures on the global economy, said Stephen Brennock, an analyst at brokerage PVM Oil Associates Ltd. The increase was much larger than expected. That followed three straight weeks of declines and was the largest weekly increase since the week ended August 10. It lost 6.9% for the week. But now that crude is near the highest in four years, it's suddenly a hot topic. WTI is on track for a 3.5 percent decline this week.
Gasoline stockpiles were up by 1 million barrels last week, while distillate stockpiles declined by 2.7 million barrels, the EIA report revealed. US Gulf of Mexico producers have cut oil output by 32 per cent and natural gas production by 13 per cent as a result of the lingering effects of Hurricane Michael, the Bureau of Safety and Environmental Enforcement (BSEE) said on Friday, citing reports from 27 companies.