US oil CLc1 dipped 11 cents to $46.99 a barrel in Asian trade, holding on to most of a 3.6 percent rally the previous day. Over the preceding two weeks, prices had tumbled from nearly $50 to dip below $45 for the first time in a month.

But revised forecasts for weaker non-OPEC global oil production and stronger demand this year helped turn the market's tide on Thursday, assuaging worries about a potential glut developing during the seasonally weak second quarter.

"A material cut in January OPEC production and disappointing growth from non-OPEC producers have thrown cold water on many of the market's concerns about near-term oversupply," Merrill Lynch said in a report.

In its monthly report, the International Energy Agency, which advises industrialised nations on energy policy, cut its forecast for non-OPEC oil supply growth this year, revised upward estimates of demand and predicted a sharp fall in stocks.

Disappointing supply growth, particularly from number two producer Russia, has been compounded by the pace of incremental consumption, which last year grew at the fastest rate in a generation to fuel a 34 percent price rally.

Temperatures next week in the Northeast, which consumes the bulk of oil demand in the world's biggest energy user, should be near to below normal, forecasters Meteorlogix said.