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By
Shadia Nasralla and Julia Payne
LONDON (Reuters) - Oil prices edged higher on Friday, supported
by a weaker dollar, though tensions between the United States
and China weighed.
Brent crude <LCOc1> was up 26 cents at $43.57 a barrel at 0944
GMT, while U.S. West Texas Intermediate (WTI) crude <CLc1> was
up 29 cents at $41.36.
"Both crude benchmarks are roughly back where they were before
this week’s upside breakout. Looking ahead, the oil market will
likely settle back into a wait-and-see mode amid the
increasingly uncertain environment," PVM analysts said in a
note.
China ordered the United States to close its consulate in the
city of Chengdu on Friday, responding to a U.S. demand this week
that China close its Houston consulate.
The dollar slid to 22-month lows against a basket of currencies
<.DXY>.
A weaker dollar usually spurs buying of commodities priced in
dollars such as oil because they become cheaper for holders of
other currencies.
The U.S. economic outlook has darkened in the past month amid
renewed lockdowns in some states to tackle surging coronavirus
cases, according to economists in a Reuters poll.
The number of Americans filing for unemployment benefits hit
1.416 million last week, unexpectedly rising for the first time
in nearly four months, suggesting the U.S. economic recovery is
stalling amid a resurgence in COVID-19 cases.
Globally, more than 15 million people have been infected and
over 620,000 have died.
While the rise in infections has fanned fears of renewed
government lockdowns, worries that oil demand could be hit have
been exacerbated by tensions between the United States and China
- the world's top two oil consumers.
In China, congestion at east coast oil ports is adding to costs
for shippers and importers even as fuel demand stalls.
Oil prices could see a near-term correction if a recovery in
fuel demand slows further, especially in the United States,
Barclays Commodities Research said.
Still, the bank lowered its oil market surplus forecast for 2020
to an average of 2.5 million barrels per day (bpd) from 3.5
million bpd previously.
(Additional reporting Jessica Jaganathan; editing by Jason Neely
and Mark Potter)
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