U.S. crude futures edged above $89.05 a barrel on Monday, recovering from a near 2 percent drop in the previous session, supported by the political crisis in Egypt and a drop in the U.S. unemployment rate to a 21-month low.

Oil prices were also buoyed by comments made by OPEC members at the weekend. Kuwait said oil prices could exceed $110 a barrel if Egypt's unrest continued, and Venezuela said prices could more than double to $200 if the Suez Canal closed.

Iran -- which holds the rotating OPEC presidency -- said there would be no need for an emergency OPEC meeting even if oil prices hit $120.

U.S. crude for March climbed 7 cents to $89.10 a barrel at 0356 GMT, while ICE Brent rose 43 cents to $100.26 a barrel.

Oil prices fell nearly 2 percent on Friday as an unfounded report from Egypt set off speculation that President Hosni Mubarak could step down shortly.

Opposition groups including the banned Muslim Brotherhood held talks with the government on Sunday to resolve Egypt's political crisis but said their core demand for the removal of the president was not met.

Demonstrators in central Tahrir Square, focal point of an uprising that has rocked the Arab world and alarmed Western powers, said they would intensify their 12-day battle to oust the president who has vowed to stay on until September.

What really worries traders is that unrest in Tunisia and Egypt could fuel similar protests in bigger oil producers such as Libya -- or even Saudi Arabia, creating massive uncertainty over oil supplies.

It could be possible for U.S. crude value to rise above $95.00 a barrel next week, but that would likely be unsustainable. The unrest in Egypt will be resolved, said Benson Wang of Commodity Broking Services in Sydney.

OPEC (Organization of the Petroleum Exporting Countries) is more than happy to see those levels, and job data in the U.S. is also positive, but in my opinion, $90 a barrel is going to hurt the economy's recovery.

Egypt controls the Suez Canal and the Suez-Mediterranean (SUMED) oil pipeline, which together moved over 2 million bpd of crude and oil products in 2009.

More than 34,000 vessels passed through the canal in 2009, of which nearly 2,700 were oil tankers carrying some 29 million tonnes of oil, according to the U.S. Energy Information Administration.

Venezuela's oil minister Rafael Ramirez, who is usually hawkish on prices, said on Friday that OPEC would call an emergency meeting if the canal closed.

There is sufficient oil (in the market) and there have been no interruptions, but if they close Suez, that could take the oil price to $200, he told reporters.

OPEC members will meet with consumers at an energy conference in Riyadh on February 22 and are expected to talk informally about output levels.

The dollar held its ground against a basket of major currencies early in Asia on Monday, with markets growing wary of a reversal in a bearish trend after the greenback bounced off multi-month lows versus the euro late last week.

The dollar index, which tracks the greenback against a basket of major currencies, slipped 0.19 percent at 77.892 at 0255 GMT but still above a three-month low of 76.881 plumbed on Wednesday.

On the data front, the U.S. economy added a meager 36,000 jobs in January, far less than expected, as severe snow storms slammed large parts of the nation, but the unemployment rate fell to its lowest level since April 2009.

Money managers increased their net long crude futures positions in the week through Feb 1 to 176,448 from 155,487 positions.

Unemployment Libya Tunisia OPEC