NEW YORK (MarketWatch) -- Crude-oil prices veered between gains and losses Friday, bolstered by a weaker dollar and prospects that energy demand would rise as the global economy recovers, even as investors pose fresh questions about the health of the rebound. "Reports from the International Energy Agency and the Organization of Petroleum Exporting Countries forecast that this year's demand recovery will continue into 2011," noted analysts at Action Economics. BP Says Oil Has Stopped Leaking After a few delays, BP has started testing the new cap on the leaking well in the Gulf of Mexico. Also, in Washington, the EPA is discussing the use of chemicals to break up the spilling oil. Video courtesy Fox News. Crude for August delivery lost 34 cents, or 0.2%, to stand at $76.28 a barrel in electronic trading on the New York Mercantile Exchange. The dollar index /quotes/comstock/11j!i:dxy0 (DXY 82.19, -0.37, -0.45%) , which tracks the performance of the U.S. unit against six other major currencies, was off 0.5% at 82.165. A softer dollar often translates into support for oil and other commodities priced in the U.S. currency, as it makes them less costly for holders of other currencies. Also on energy traders' radar screens were the latest developments involving BP PLC /quotes/comstock/13*!bp/quotes/nls/bp (BP 38.92, +2.74, +7.57%) /quotes/comstock/23s!a:bp. (UK:BP. 417.30, +15.55, +3.87%) and efforts to stanch the flow of oil from its stricken well at the bottom of the Gulf of Mexico. See related story. Investors held their collective breath over initial signs of progress in stemming the flow of oil nearly three months after the explosion and sinking of the Deepwater Horizon drilling rig. The British oil company said it stopped the flow Thursday but wouldn't know whether the latest containment cap would hold until a day or two later. Kate Gibson is a reporter for MarketWatch, based in New York.

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