oil Reuters

Crude oil prices advanced slightly in Asian trading Friday, after plunging to their lowest level in eight months in the previous session.

Light sweet crude for August delivery gained 0.40 percent or 31 cents to $78.51 a barrel in electronic trading on the New York Mercantile Exchange during Asian trading hours. Brent crude oil futures for August delivery rose 0.66 percent or 59 cents to $105.87 a barrel on the ICE futures exchange in London.

On Thursday, light sweet crude for August delivery plunged 4 percent or $3.25 and settled at $78.20 a barrel, the closing level since October, on the New York Mercantile Exchange while Brent crude futures closed below $90 a barrel for the first time since December 2010 as the oil markets were hit by weak economic data from China and the U.S.

The sell-off came after soft global economic data with further drop in China and euro zone PMI manufacturing, slump in U.S. Philly Fed Index and higher U.S. jobless claims.

The number of Americans filing for first-time jobless benefits declined by 2000 to a seasonally adjusted 387,000 for the week ending June 16 but fell short of economists' expectations.

The Philadelphia Federal Reserve Bank said that factory activity in the Mid-Atlantic region unexpectedly slumped to -16.6 in June from -5.8 in May, suggesting regional contraction in the manufacturing activity while existing home sales in the U.S. in May fell 1.5 percent to a 4.55 million annualized rate, suggesting that the recovery in housing market demand has lost a bit of momentum.

News that manufacturing activity in the world's second largest economy continued to contract for the eighth straight month also added to the downslide. The HSBC Flash Purchasing Managers Index (PMI), a measure of the nation-wide manufacturing, declined to 48.1 in June compared to 48.4 in May.

Meanwhile, swelling U.S. and global oil inventories amid sluggish demand also sent the oil prices to an 8-month low. The data from the U.S. Energy Information Administration (EIA) Wednesday showed that oil inventories grew 0.7 percent or 2.9 million barrels to 387.3 million barrels last week, the highest level since July 1990.

Supply is outstripping demand and whatever other data you see out there won't change that. People who are long on oil are just biting the bullet and heading home, Dominick Chrichella, senior partner at the Energy Management Institute in New York, told Reuters.

The price of crude oil in New York trading has fallen more than 28 percent in the last two months following concerns over the deepening euro zone sovereign debt crisis and waning global oil demand while Brent has fallen nearly $40 a barrel since hitting $128.40 in early March.