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London - Oil prices hovered near 31-month highs as a weak dollar and violence in North Africa outweighed concerns about slowing growth in top consumer the United States.
In its last trading day of April, US crude was heading for its eighth consecutive month of gains, the longest run of monthly increases since 1983, Reuters data showed.
US crude was down 18 cents in morning trade at $112.68 after settling at $112.86 a barrel on Thursday, the highest since the close on September 22 2008.
Brent futures were down 2c to $125 a barrel on Friday, $2 short of its 2011 high of $127.02.
Both US and Brent crude regained some ground lost earlier on Friday after eurozone data showed the inflation rate rose further above the European Central Bank’s target in April.
The data increased the chances of another interest rate rise in June, despite weakening economic sentiment. The news helped push the dollar index down against a basket of major currencies, with the greenback languishing near three-year lows.
“European markets are becalmed by three consecutive short trading weeks, and market activity has been fairly limited during this time. Geopolitical concerns in North Africa and the Middle East remain, with the conflict in Libya at an impasse and Syrian unrest increasing,” said Lawrence Eagles from JP Morgan.
Forces loyal to Libyan leader Muammar Gaddafi on Friday attacked the Tunisian town of Dehiba, near the Libyan border.
Morocco, which borders major oil and gas producer Algeria, said a bomb explosion that killed at least 14 people on Thursday in its busiest tourist destination was a terrorist act.
Seen sideways
The weak dollar also helped push silver and gold within sight of historic highs as investors sought alternative assets.
Oil hovered near multi-month peaks despite weak US data, which showed on Thursday that economic growth had braked sharply in the first quarter as higher food and gasoline prices dampened consumer spending and sent inflation rising at its fastest pace in two-and-a-half years.
“At current price levels the main downside risk comes from demand destruction,” said Olivier Jakob from Petromatrix consultancy.
Growth in the US gross domestic product slowed to an annual rate of 1.8% from a fourth-quarter pace of 3.1%, the commerce department said. Economists had expected a 2% pace.
Victor Shum, an analyst at Purvin & Gertz, said oil prices would continue to trade sideways in the next few days.
“Any aggressive exit is unlikely, because what are the alternatives for investors?” Shum said. “If the global economy tanks, stocks will go down. Oil will stay supported because of geopolitical risks.”
“With renewed buying being seen from Asian customers, we continue to see upside price risks in the environment, unless more concrete action from Opec members is forthcoming,” said JP Morgan’s Eagles.
In its last trading day of April, US crude was heading for its eighth consecutive month of gains, the longest run of monthly increases since 1983, Reuters data showed.
US crude was down 18 cents in morning trade at $112.68 after settling at $112.86 a barrel on Thursday, the highest since the close on September 22 2008.
Brent futures were down 2c to $125 a barrel on Friday, $2 short of its 2011 high of $127.02.
Both US and Brent crude regained some ground lost earlier on Friday after eurozone data showed the inflation rate rose further above the European Central Bank’s target in April.
The data increased the chances of another interest rate rise in June, despite weakening economic sentiment. The news helped push the dollar index down against a basket of major currencies, with the greenback languishing near three-year lows.
“European markets are becalmed by three consecutive short trading weeks, and market activity has been fairly limited during this time. Geopolitical concerns in North Africa and the Middle East remain, with the conflict in Libya at an impasse and Syrian unrest increasing,” said Lawrence Eagles from JP Morgan.
Forces loyal to Libyan leader Muammar Gaddafi on Friday attacked the Tunisian town of Dehiba, near the Libyan border.
Morocco, which borders major oil and gas producer Algeria, said a bomb explosion that killed at least 14 people on Thursday in its busiest tourist destination was a terrorist act.
Seen sideways
The weak dollar also helped push silver and gold within sight of historic highs as investors sought alternative assets.
Oil hovered near multi-month peaks despite weak US data, which showed on Thursday that economic growth had braked sharply in the first quarter as higher food and gasoline prices dampened consumer spending and sent inflation rising at its fastest pace in two-and-a-half years.
“At current price levels the main downside risk comes from demand destruction,” said Olivier Jakob from Petromatrix consultancy.
Growth in the US gross domestic product slowed to an annual rate of 1.8% from a fourth-quarter pace of 3.1%, the commerce department said. Economists had expected a 2% pace.
Victor Shum, an analyst at Purvin & Gertz, said oil prices would continue to trade sideways in the next few days.
“Any aggressive exit is unlikely, because what are the alternatives for investors?” Shum said. “If the global economy tanks, stocks will go down. Oil will stay supported because of geopolitical risks.”
“With renewed buying being seen from Asian customers, we continue to see upside price risks in the environment, unless more concrete action from Opec members is forthcoming,” said JP Morgan’s Eagles.
