26 February,2010 10:10 AM IST | | Agencies
Oil was above USD 78 a barrel in Asian trade on Friday, bouncing from steep falls on the back of a weaker US dollar.
Analysts said however that global demand remained weak amid healthy crude stockpiles, keeping prices within range.
New York's main futures contract, light sweet crude for April delivery, was up 41 cents to USD 78.58 a barrel, after falling USD 1.83 in US trade yesterday. London's Brent North Sea crude for April delivery was up 38 cents to USD 76.67 a barrel after shedding USD 1.80.
With global crude stocks still outstripping demand, analysts said investors were keeping a close watch on other indicators. "Oil tends to rise when the dollar is weaker," said Jason Feer, vice president and general manager with energy market analyst Argus Media in Singapore.
"The fundamentals have been weak and there's been a large supply overhang so at this point it's likely due to the dollar," he added.
Oil is traded in dollars and a weaker US unit makes the commodity cheaper to holders of other currencies, stimulating demand and pushing prices higher.
In Asian trade today, the dollar was under pressure after higher US jobless benefit claims clouded the outlook for the world's largest economy.
The US Labor Department said on Thursday that new claims for jobless benefits had jumped to a three-month high, raising doubts about the strength of the economic recovery.
