LONDON (Agencies): Oil retreated on Friday, hit by gloom surrounding prospects for the global economy and dollar gains, but Brent crude outperformed other commodities, supported by tight supply in Europe and the United States.Brent for October delivery was down 22 cents at $114.33 by 1126 GMT, but still on track to gain about 2 percent this week.US crude oil fell $1.02 cents to $88.03 a barrel, though it was still up over 1.5 percent this week. Oil was pressured by dollar strength as the euro fell to a six-month low after the European Central Bank dropped its growth forecast. Oil, priced in dollars, falls as the US currency appreciates as it becomes less affordable for holders of other currencies.Other commodities like copper and risk sensitive equities fell more sharply than Brent as investors once again focused on global economic worries.US President Barack Obama’s proposed $447 billion package of tax cuts and spending plans aimed at boosting growth and job creation failed to restore confidence to jittery markets.“There’s been no good news on the fiscal and economic outlook, with the OECD lowering forecasts for growth and the IMF warning of global stagnation and this does not augur well for oil demand,” said Michael Hewson, analyst at CMC markets. Economic policymakers had to act with “conviction and urgency” in supporting a faltering global economy, the International Monetary Fund’s director Christine Lagarde said, giving her blessing to further quantitative easing.The outlook for economic growth in developed countries has got much worse in the last three months, the OECD said on Thursday.Brent outperformed US crude, pushing its premium to nearly $26 per barrel, not far off an all-time peak as tight supply put a floor under the benchmark.A series of outages in North Sea oil fields, used to set the global Brent benchmark, have led to two cargoes being dropped from September’s loading schedule.Violence in North Africa and the Middle East is also having a significant impact on supply.“There is tightness in the market, with the North Sea outages, the embargo of Syria limiting oil coming into Europe and with the problems in Libya,” Andy Sommer, senior energy analyst at ELG in Deitikon, Switzerland said.In Libya, the man tasked with running the country, interim Prime Minister Mahmoud Jibril, reminded his forces that the war was not over yet as the latest deadline for the surrender of pro-Muammar Gaddafi towns loomed and fighters massed on both sides.
