New York's main contract, light sweet crude for March delivery, eased a penny to USD 34.61 a barrel, within sight of the USD 32.40 hit on December 18, when prices hit their lowest point in nearly five years.

Brent North Sea crude for April delivery was 36 cents higher at USD 39.91.

Sentiment remained weak, with investors still concerned about the state of the US economy, the world's biggest energy user, dealers said.

The US Federal Reserve in its latest forecast on Wednesday said the US economy would shrink this year by 0.5 to 1.3 per cent while unemployment is forecast to rise from 8.5 to 8.8 per cent.

"The Fed released its latest economic projections overnight... the tone could hardly be called positive," said Jan Lambregts, head of regional research with Rabobank in Hong Kong.