London: Oil edged further above $86 a barrel on Wednesday after an industry report showed a smaller-than-expected rise in U.S. crude inventories, extending a tentative recovery from a four-year low.

Global benchmark Brent slid from $115 in June to below $83 last Thursday on abundant supply and concern that slowing economic growth in Europe and China would hit oil demand. The market may be bottoming out, according to some analysts.

Brent crude was up 58 cents at $86.80 a barrel at 1111 GMT, edging further away from the Oct. 16 low of $82.60, its weakest since 2010. U.S. crude rose 24 cents to $82.73.

“The price of Brent seems to be forming a bottom at $86 a barrel,” said Carsten Fritsch, analyst at Commerzbank in Frankfurt. “As winter approaches in the northern hemisphere, we should see the usual seasonal increase in demand for oil.” Giving prices some support, the American Petroleum Institute on Tuesday said U.S. crude inventories rose by 1.2 million barrels, less than the forecast increase. Investors will be looking to the U.S government’s Energy Information Administration supply report at 1430 GMT to confirm the move.

Stronger-than-expected demand figures from China helped prices to rise on Tuesday. Implied demand in the world’s second-largest consumer jumped 6.2 per cent in September from August to hit a seven-month peak.

A more upbeat tone was evident in the financial markets on Wednesday. European shares edged up, driven by some strong company earnings results and hopes of corporate bond buying by the European Central Bank.

Some oil analysts see a more bullish outlook for the market, including Standard Chartered’s Paul Horsnell, known for forecasting the market’s long rally a decade ago, who forecasts a Brent price of $105 in 2015.

Oil has come under pressure from signs that the Organization of the Petroleum Exporting Countries is reluctant to cut output when it meets on Nov. 27, although Libya’s Opec governor called/sfor a cut of at least 500,000 barrels per day.

Fritsch of Commerzbank said the market still faces a large surplus next year without Opec curbs, leaving prices vulnerable to falling again. Others say it is premature to talk of the market finding a floor.

“Brent is going into a sideways consolidation,” said Tony Machacek, broker at Jefferies in London. “It’s too early to say the market has bottomed out. For my money, it’s going to struggle to get back up to $90 for the moment.”