LONDON (Dow Jones)--Crude oil futures dipped Friday in London as a firmer dollar and weak fundamentals weighed on sentiment.
Prices came under pressure from news of two large bomb blasts at hotels in the Indonesian capital Jakarta Friday morning, which killed eight and wounded 53, in the first terror attack in the Southeast Asian nation since 2005.
The blasts "gave the dollar a lift and that's what has caused us to be slightly down," an oil broker in London said.
At 1130 GMT, the front-month September Brent contract on London's ICE futures exchange was down $0.28 at $63.47 a barrel, retracing some earlier losses.
The front-month August contract on the New York Mercantile Exchange was trading $0.30 lower at $61.72 a barrel.
The ICE's gasoil contract for August delivery was down $2 at $513.50 a metric ton, while Nymex gasoline for August delivery was down 52 points at 170.83 cents a gallon.
Despite the modest losses, crude prices were still stuck in their recent band.
The market is "struggling for real direction," another oil broker in London said. "We have been ranging for a few days now and I think it's hard for prices to rally on the back of fundamentals...we will remain tracking equities and the dollar," he added.
Prices could register steeper losses if the dollar continues to rise, said Andrey Kryuchenkov, vice president of commodities research at VTB Capital in London.
"There will more consolidation here and potentially more losses with the dollar index still dictating direction," Kryuchenkov said, pegging resistance at $62 a barrel for Nymex crude and at $63.30 a barrel for Brent.
In the absence of fresh fundamental news, the market remains concerned about an inventory glut coupled with tepid consumption in recession-hit economies.
"The recent positive data and better-than-expected corporate results may have provided a short-term boost for crude markets, but concerns remain about the underlying oil fundamentals and doubts regarding future global demand," said Nimit Khamar, an analyst at Sucden Financial in London.
Looking ahead, participants are awaiting U.S. housing starts data due at 1230 GMT for more cues about the U.S. economy and its potential for recovery.
-By Lananh Nguyen, Dow Jones Newswires; +44 (0)20-7842-9479; lananh.nguyen@dowjones.com
