International Brent crude futures were at $40.55 a barrel, up half a dollar.

Traders said that the price support came from a weaker dollar, which on Thursday fell by 2.5% against a basket of currencies in volatile trading after the European Central Bank eased aggressively.

A weaker dollar can be seen as supportive for oil prices as it makes dollar-traded oil cheaper for countries using other currencies, potentially spurring fuel demand.

Traders said prices also received support from fund money flowing into oil markets.

"The funds have turned bullish and the market seems determined to stay at or around $40," said Pete Donovan, broker at Liquidity Energy in New York.

Friday's stronger prices came following losses the previous day after a meeting between major producers to coordinate a freeze in output looked unlikely to even take place since Iran would not commit to attending.

Freed from international sanctions that more than halved its output to little more than 1 million barrels per day, Iran said it would not participate in a proposed agreement between top producers Saudi Arabia and Russia to freeze production at January levels, when both pumped over 10 million bpd.

A global glut in supply means that over 1 million bpd of crude is produced in excess of demand and that has left storage tanks around the world brimming with unsold oil. Analysts say that a fundamental reduction in supplies, for instance through a production cuts, must happen before prices can move higher.

HSBC economist Fred Neumann said "the problem... lies with all the extra supply (eg Iran) that has poured onto markets. That means that even a (demand) pick-up in China, in any event likely to be marginal, may not be enough to sustain the latest rally."

To reduce the supply overhang, Neumann said "more supply destruction is needed. And that, amid record low interest rates, will take some time."