Oil rises on improved German sentiment

Fri Apr 20, 2012 5:13pm EDT
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By Robert Gibbons

NEW YORK (Reuters) - Oil prices rose on Friday as improved German business sentiment countered nervousness about the euro zone debt crisis, while a weaker dollar and stronger equities also lent support.

Brent crude's gains could not prevent a second straight weekly loss, while U.S. crude managed a 22-cent weekly gain as the expiring May contract went off the board higher, though well below its intraday peak as Wall Street pared gains.

German business sentiment rose for the sixth month in a row in April. The Munich-based Ifo think tank said its business climate index inched up from March to its highest since July 2011.

The German data helped fuel the euro's climb to a two-week high against the dollar, and the greenback's weakness coupled with stronger equities added lift for oil prices. <USD/> .N .EU

"People are talking about the Ifo being better than expected and may be reducing the fear about the debt crisis, and the weak dollar and higher equities help crude, along with short-covering ahead of the weekend," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

Brent June crude rose 76 cents to settle at $118.76 a barrel, having reached $119.69. For the week, Brent fell $3.07, or 2.52 percent and it slumped to $116.70 intraday on Wednesday, the lowest since February 10.

Expiring U.S. May crude gained 78 cents to settle at $103.05 a barrel, after rising $2 to $104.27.

U.S. June crude added $1.16 to settle at $103.88 a barrel.   Continued...