NEW YORK: Oil extended a rebound Friday, rising aboveUS$127 a barrel after several declines over the past two weeks, although the market remains weighed down by the belief that falling fuel demand does not justify the recent high prices.

In London, September Brent crude rose 56 cents to US$127 a barrel on the ICE Futures exchange.

Light, sweet crude for September delivery rose 67 cents toUS$126.16 a barrel in electronic on the New York Mercantile Exchange by early afternoon in Singapore. The contract raised US$1.05 to settle at US$125.49 a barrel on Thursday.

Oil prices fell sharply the day before, tumbling US$3.98 to settle at US$124.44 a barrel, its lowest finish since June 4. Crude has fallen in six of the past eight sessions, and now sits nearly 15percent below its peak above US$147 a barrel earlier this month.