MW: Oil futures edge lower as energy-demand fears clip gains
Prices fluctuate, lately slipping back from intraday high of $86 a barrel
By Nick Godt & Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) -- Oil futures fluctuated Friday as those who are skeptical of a pickup in energy demand appeared to win over those pointing to positive sentiment in Wall Street and dollar weakness as supportive of crude prices.
Crude oil for May delivery, the most active contract, lost 17 cents, or 0.2%, to $85.24 a barrel on the Comex division of the New York Mercantile Exchange. Crude earlier hit an intraday high of $86.45 a barrel in electronic trading.
Those pushing for prices north of $86 a barrel on an increase in energy demand due to the economic recovery have admitted such prices "would threaten that very recovery," said Mike Fitzpatrick, an analyst with MF Global in New York.
On the week, oil has gained nearly 0.5%. Fitzpatrick sees prices heading lower and not testing the $87-$90 range.
Oil remains overbought at current levels, said Dan Flynn, energy trader at MF Global.
For now, crude oil was ignoring dollar weakness and its inverse correlation to dollar movements.
A decline in the value of the greenback usually boosts dollar-denominated commodities such as oil because it makes them cheaper for holders of other currencies.
The dollar index (DXY 80.96, -0.58, -0.71%) , which tracks the performance of the greenback against a basket of other major currencies, fell 0.4% to 81.15.
Greek government bond yields, which soared to 11-year highs this week on fears of default, eased back somewhat, boosting the euro. Read more on the euro and dollar.
Crude-oil prices finished slightly lower on Thursday, falling for a second session, after data showing a rise in U.S. jobless claims dimmed optimism about the pace of the economic recovery.
Energy prices are likely to close out the week on a subdued note given the thin macroeconomic calendar, said Edward Meir, senior commodity analyst at MF Global.
"We look to next week to see whether prices can make a renewed stab at breaking towards new highs, or if the fund crowd, who are predominantly long, tire of the price stall and look to pare some length," Meir wrote in a note to clients.
