MW: Oil futures edge lower, but set for weekly gains
May futures turn higher as April contract set to expire
Oil futures edged lower Friday, pressured by a slight rebound in the dollar, but held above $51 a barrel and were set for a fifth week of gains after the Federal Reserve's aggressive measures this week boosted optimism of a global economic recovery.
Crude oil for April delivery fell 49 cents, or 1%, to $51.12 a barrel in electronic trading on Globex. The April contract expires Friday.
But crude for May delivery, which drew higher trading volume, rose 9 cents to $52.12 a barrel.
"With little fresh fundamental input expected today, trading may be governed by technicals and position-balancing before the weekend," said Brenda Sullivan, an analyst at Sucden Financial Research.
In the currency markets, the U.S. dollar rebounded Friday but remained in line for a huge weekly loss against major rivals following the Fed's decision this week to massively pump up the supply of dollars in a bid to jumpstart the economy and avert a deflationary spiral. See Currencies.
A firmer dollar pressures dollar-denominated commodities, such as crude oil, as it makes them more expensive for holders of others commodities.
But "for now, crude looks set for the fifth week in a row of gains and a possible climb out from the previous range," Sullivan said in a research note.
On Thursday, oil prices soared more than 7% to end at their highest level in nearly four months, as the Federal Reserve's decision to buy government bonds ignited hope for an economic recovery and increased energy demand.
"With the economic optimism and stronger oil technical picture, it is increasingly likely that we have seen crude prices move to a new structure," Sullivan said.
A new trading range between $40 and $60 may develop in the next several weeks, she said.
Also on Globex, April reformulated gasoline fell 2 cents to $1.47 a gallon and April heating oil dropped 2 cents to $1.39 a gallon.
April natural-gas futures rose 11 cents to $4.35 per million British thermal units.
U.S. stocks edged lower Friday, but were still on track for a strong week of gains, with Palm and Sony Ericsson reports reinforcing the worries that have led central banks across the globe to take unprecedented steps to try to help the economy.
