WORLD oil prices gained in Asia on Friday amid jittery trade after earlier slumping on scepticism over a joint effort by central banks aimed at easing credit conditions.

In afternoon trade, New York's main contract, light sweet crude for January delivery, was 44 cents higher at US$92.69 (S$134) a barrel.

The contract had fallen 2.14 dollars to close at 92.25 dollars a barrel in New York on Thursday.

'I think you've got a very jittery market at the moment,' said David Johnson, of Macquarie Securities in Hong Kong.

Prices had jumped more than four dollars on Wednesday on the view that a coordinated plan by five major central banks to ease a global credit squeeze would support the world economy and, as a result, demand for oil.

The initiative, led by the US Federal Reserve, included the central banks of the eurozone, Britain, Switzerland and Canada.

However, oil prices subsequently retreated in volatile trade as dealers, on further reflection, feared the plan would not work.

'The Fed is freaked out, the floor traders are not happy, and the energy markets keep roiling along,' Alaron Trading's Phil Flynn said during US hours.

'I think the underlying trend is down' on fears of an economic slowdown in the United States, and possibly in Europe, Mr Johnson said.

There is also uncertainty about how much oil the Organisation of the Petroleum Exporting Countries (Opec) cartel is producing, he added.

'You might find that there is an extra million barrels a day added into the system' by year's end, Mr Johnson said.

The figure would include an extra 500,000 barrels per day which Opec said it would pump from Nov 1. -- AFP