Oil little changed in thin, tug-of-war trade
By Robert Gibbons
NEW YORK (Reuters) - Oil prices closed little changed on Friday after light, tug-of-war trading, as hopes for additional easing by the Federal Reserve to boost a sputtering U.S. recovery countered concerns about economic growth.
Brent edged lower and U.S. crude rallied late, reducing Brent's premium to its U.S. counterpart, while both contracts posted their second consecutive weekly gains.
Prices felt pressure early, after ratings agency S&P downgraded Spain's credit rating, adding to economic concerns about the euro zone. Oil pared losses ahead of U.S. GDP figures that showed growth cooled in the first quarter.
Some investors believe slowing U.S. growth may prompt the Federal Reserve to launch a third round of government bond buying, or quantitative easing, known in markets as QE3.
"Bad news for the economy is being interpreted as good news for commodities because it may put QE3 back on the table," said Dominick Chirichella, senior partner at Energy Management Institute in New York. "Whether or not that trade has any longevity is not clear."
The dollar's weakness and strong equities on Wall Street added support for crude, along with a rise in U.S. consumer sentiment.
Brent June crude fell 9 cents to settle at $119.83, having traded in a range of $119.06 to $119.95. Brent had a nearly 1 percent weekly gain but remained on pace to post a more than 2 percent monthly loss.
U.S. June crude rose 38 cents to settle at $104.93, having reached $105 but stalling ahead of the 50-day moving average of $105.10. The weekly gain was 1.8 percent, on track for a similar monthly rise. Continued...