LONDON (AP) -- Oil prices bounced higher for a second straight day on Friday, rising above $62 a barrel, though many analysts believe supplies are ample and could signal lower prices ahead.



The possibility of a production cut by OPEC, as well as a sharp move lower over the past two months, has brought out bargain hunters who believe oil is reasonably priced at around $60.



Light sweet crude for November delivery gained 43 cents to $62.02 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Europe. The contract on Thursday rose 85 cents to settle at $61.59 per barrel.



November Brent crude on London's ICE futures exchange rose 27 cents to $61.61 a barrel.



Heating oil futures added 0.38 cents to $1.6826 a gallon while gasoline prices rose 1.45 cents to $1.5139 a gallon. Natural gas futures were down 3.6 cents to $4.745 per 1,000 cubic feet.



Crude oil futures have plummeted more than 20 percent over the past two months as worries ease about supply threats and as signs of economic weakness in the U.S. point to a possible softening in demand for energy. On Wednesday, prices fell by more than $1 a barrel in selling that briefly took oil prices below $60 a barrel -- the level the Organization of Petroleum Exporting Countries has hinted could initiate an output cut.



"There is already some evidence that OPEC has reduced production from the Middle East and is committed to supporting high prices," Morgan Stanley said Friday.



The latest U.S. Energy Department data showed distillate fuel inventories growing by 4.1 million barrels last week to 148.7 million barrels, or more than 11 percent above year-ago levels. Gasoline inventories increased by 600,000 barrels to 207.6 million barrels, or 6 percent above year ago levels.



Crude oil inventories declined by 2.8 million barrels to 324.9 million barrels -- but that's still 5 percent more than last year and well above the five-year average for this time of year.



Analysts said that with geopolitical and weather risks easing -- and speculators taking chips off the table -- energy futures could continue to tumble. Natural gas is most vulnerable to further declines, at least until the first cold snap arrives in the U.S., they said.



U.S. stocks data showed domestic natural gas inventories increased by 93 billion cubic feet last week to 3.18 trillion cubic feet -- a record level for this time of year and 12.5 percent above year ago levels.