Oil was slightly higher in Asian trade on Monday but investors remained cautious over the outlook for energy demand as worries remain over the strength of the US economic recovery, analysts said.

New York's main contract, light sweet crude for December delivery gained 25 cents to $77.25 a barrel.

Brent North Sea crude for December delivery was two cents higher at $75.22.

While data released on last Thursday showed the US has emerged from a prolonged recession, consumer spending, which accounts for two-thirds of the nation's economic activity, fell in September.

"I think the reality is that the economic signals out there have been mixed," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.

"Last week there was positive US (gross domestic product) but consumer spending was quite negative."

Shum added that "even though there are signs of economic recovery, the recovery appears to be on a shaky ground and also somewhat uncertain."

The US said on Friday consumer spending in the world's biggest economy and energy user fell for the first time in five months in September.

A day earlier, the Commerce Department said the US economy grew at a seasonally adjusted 3.5 percent in the September quarter from the previous three months.

It was the biggest growth in two years as the country emerged from a brutal recession that started in December 2007.

"The takeaway is that stimulus efforts helped turn the economy around in the third quarter. Once the cosmetics are taken away, though, will things look as pretty? Probably not," said Patrick O'Hare, an analyst at Briefing.com.

AFP

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