Oil price supported by European equity rises

London: Oil was slightly higher yesterday supported by rises in European equities, which in turn were aided by BP's cap on its leaking well in the Gulf of Mexico.

US crude for August rose 12 cents to $76.74 (Dh281) a barrel by 1034 GMT — a reversal of Thursday's moderate slide. The contract was heading for its second consecutive weekly increase, trading a few cents higher than last week's close.

London Brent's new front-month September crude oil futures contract was up 4 cents at $76.13.

"Yesterday we got some negative US economic data which is weighing on prices but the weaker US dollar is lending support," said Carsten Fritsch, oil analyst at Frankfurt-based Commerzbank.

Yesterday the dollar continued the previous day's falls against a basket of currencies, with another 0.3 per cent decline. A weaker dollar makes commodities like oil cheaper for some buyers holding alternative currencies.

However, Rob Montefusco of Sucden Financial suggested oil markets had "completely decoupled" from currency markets.

The dollar's fall on Thursday did not prevent a decline in the price of oil.

Poor US industrial data on Thursday was partially offset by positive jobs numbers, leaving a cloudy outlook for the economic health of the world's largest energy consumer.

Analysts said overall the data highlighted the fragility of the US economic recovery.

"The manufacturing data is more important because it is forward-looking. The jobs data is lagging behind," Fritsch said.

Six-week range

US crude prices have traded in a range between $71 and $80 for almost six weeks as volatility related to the European debt crisis dwindled.

Over the year, they have stayed within a $23 span, hitting a 19-month peak above $87 and a trough below $65, both in May.

An oceanic weather system in the Caribbean had a 10 per cent chance of strengthening into a tropical cyclone over the next two days, the US National Hurricane Center said. It was days away from potentially entering the Gulf of Mexico.

The market's attention turned to second quarter results from Bank of America and Citigroup yesterday.