Brent crude fell on Friday, reversing earlier gains, as European debt woes weakened the euro and a US consumer outlook fell to a 31-year low.
The dollar firmed, making oil more expensive for holders of foreign currencies. The euro came under pressure on speculation that debt-laden Italy may have its sovereign rating downgraded, just as Greece finalizes plans to restructure its own debt payments.
Brent crude for November fell 3 cents to USD 112.27 a barrel by 12:35 pm EDT (1635 GMT). Europe's benchmark crude had risen above USD 114 a barrel in earlier trading.
US crude took a bigger fall, dropping USD 1.41 a barrel to USD $87.99. A Thomson Reuters/University of Michigan survey of US Consumers' preliminary September consumer sentiment rose slightly, but consumers' outlook for the future fell to the lowest since 1980.
"Oil investors have to be getting worried about global demand going forward, and the risk of contagion in Europe from Greece to other economies," said Richard Ilczyszyn of MF Global in Chicago.
Brent's losses trailed those of US crude as the European contract switched to a new front-month, November, and investors bet it would gain in value versus later months on tight prompt supply of North Sea crudes.
Brent for November traded on Friday at a USD 24.18 a barrel premium to West Texas Intermediate for the same month. The spread had closed at USD 22.71 on Thursday.
North Sea Delays
North Sea Forties crude, one of the key crude oil streams used to price about two thirds of global physical oil, has been suffering from production problems and loading delays since May, supporting Brent crude futures.
Shipments of Forties crude oil are being further delayed due to production shortfalls, trade sources said on Thursday.
