Oil bounces around $99 on volatile dollar
Oil prices fluctuated around $99 a barrel Friday, mirroring changes in the value of the U.S. dollar and concerns about global appetite for crude.
By early afternoon in Europe, benchmark crude for June delivery was up 15 cents to $98.59 a barrel in electronic trading on the New York Mercantile Exchange.
The June contract, which expires later Friday, fell $1.66 to settle at $98.44 on Thursday.
Earlier in the session, it rose to $99.60 as the dollar weakened and made commodities like oil cheaper for investors holding other currencies.
After rising early Friday, the euro fell to $1.4217 from $1.4309 late Thursday while the dollar recovered to 81.74 yen from 81.69 yen.
In London, Brent crude for July delivery was down 30 cents to $111.12 a barrel on the ICE Futures exchange.
Crude has bounced around in the upper-$90s most of this week as investors eye a volatile dollar and mixed signs about the strength of the global economy and oil demand.
"The price of oil has recently been driven up more by supply concerns and not stronger demand," said analysts at Commerzbank in Frankfurt. "The higher price level could therefore lead to an abrupt weakening of demand from a certain point and thus trigger a sharp fall in price."
The International Energy Agency said Thursday that higher fuel costs — crude jumped to near $115 earlier this month from $84 in February — threaten to slow the global economic recovery. Japan said its economy slipped into recession last quarter after gross domestic product fell an annualized 2.3 percent in the January-to-March period.
"The fundamentals for commodity prices are starting to weaken as the world economy slows and supply recovers from recent shocks," Capital Economics said in a report.
In other Nymex trading in June contracts, heating oil lost 0.44 cent to $2.8903 a gallon and gasoline dropped 0.55 cent to $2.9205 a gallon. Natural gas futures slid 0.9 cent to $4.085 per 1,000 cubic feet.
Alex Kennedy in Singapore contributed to this report.