Light, sweet crude for November delivery rose 40 cents to US$87.80 (S$128,20) a barrel in Asian electronic trading on the New York Mercantile Exchange by late afternoon in Singapore.

The Nymex crude contract lost 21 cents to settle at US$87.40 a barrel on Wednesday in the U.S. after trading at a record US$89 a barrel.

'Short-covering' could be behind the late rise in Asia after the plunge from Wednesday's record, said Mr Tetsu Emori, commodity markets fund manager at ASTMAX Futures Co. in Tokyo. Short-covering refers to buying by investors who had bet prices would fall.

The rise could also be due to 'concerns about the tensions between Turkey and Iraq and possible disruption of oil from Turkey's port,' Mr Emori said.

Some Iraqi oil is piped to the Turkish export terminal of Ceyhan and traders worry tension between Turkey and Iraq would disrupt those deliveries. While exports of crude from Kirkuk to Ceyhan have been sporadic since the US-led invasion of Iraq in 2003, oil has been flowing the past two months, and in recent days was being shipped at a rate of about 500,000 barrels a day, according to Dow Jones Newswires.

On Wednesday, though, unexpectedly large gains in US crude oil and gasoline inventories won the day over news that Turkey's parliament approved a government plan to attack Kurdish rebels in northern Iraq.

The US Energy Department's weekly inventory report also countered previous perceptions that oil supplies are falling and demand is growing, analysts said. Many argue that speculative investing is the real culprit behind oil's rally over the last week.

Supply and demand fundamentals do not support prices near US$90 a barrel, they say.

Also, despite the vote of approval by the parliament, Turkey's government said a move into Iraq isn't imminent, and a Turkish incursion would have minimal impact on Iraqi oil supplies, analysts said. -- AP