By Sherry Su Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Crude-oil futures are lower in Europe Friday as traders continue to take their cue from a firm dollar in the absence of bullish economic news. The euro resumed the downtrend against the dollar in Europe Friday morning mainly due to growing concern over Greece's debt problem. Traders are worried the Greek debt crisis, as well as deficit problems in other European countries, may continue to pressure the euro for a long time. Partly due to this, traders have been reluctant to push crude oil higher despite the fact that the fundamentals of crude oil have been improving. "The trade remained very technical, and no one was willing to buy on fundamental news alone, instead keeping an eye on the currency market," said Andrey Kryuchenkov, vice president of commodities research of VTB Capital. At 1120 GMT, the front-month May Brent contract on London's ICE futures exchange was down $0.71 at $80.77 a barrel. The front-month April light, sweet crude contract on the New York Mercantile Exchange was trading $0.63 lower at $81.57 a barrel. The ICE's gasoil contract for April delivery was down $2.50 at $671.25 a metric ton, while Nymex gasoline for April delivery was down 1.54 cents at $2.2855 a gallon. Front-month Nymex light, sweet crude futures failed to retest the 2010 high of $83.95 a barrel Thursday, triggering speculation that a technical retreat might be on the cards given the current high level of long positions held by noncommercial traders. It seems "a retest of the 2010 high of $83.95 on WTI [West Texas Intermediate] will be delayed," said Edward Meir, senior commodity analyst at MF Global. "We suspect that the longer it takes for WTI to retest this level, the greater the likelihood is that prices will turn lower, considering that existing noncommercial long positions are now at two-month highs." "Long money" may decide to pull out in the event of a price stall, "leading to much sharper decline than what we have been seeing thus far," he said. On the fundamental front, there are some uncertainties. Although global oil demand has been improving since early last year, higher oil prices may cripple the fragile recovery, analysts said. "There has been some improvement in oil demand during 2009, but we need to always keep in mind that this improvement has been done in an environment of oil prices below $75 a barrel, if not below $70 a barrel," said Olivier Jakob, managing director of Swiss consultancy Petromatrix. "We continue to find it premature and adventurous to assume that crude above $85 a barrel with a strong dollar would have a negligible impact on the sustainability of the oil demand recovery," he said. -By Sherry Su, Dow Jones Newswires; +44(0)20-7842-9329; sherry.su@dowjones.com

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