Oil prices chop higher on mixed signals

NEW YORK, May 21 (AFP): Oil prices rose Friday amid erratic trade in New York as traders focused on disappointing economic data and signs of firming demand. The main West Texas Intermediate (WTI) contract, light sweet crude for July, closed at $99.49 a barrel on the New York Mercantile Exchange, a gain of $1.05 from Thursday. London's Brent North Sea crude for delivery in July settled 97 cents higher at $112.39. The benchmark WTI contract swung wildly between $95.99 and $99.90 during the session. "Initially the market was very weak this morning in response to the stronger dollar," which makes dollar-priced crude more expensive, said Rich Ilczyszyn at futures brokerage Lind-Waldock. But the greenback later weakened, lending support to oil prices. In addition, there was an impact from market-positioning ahead of the weekend, the analyst said, as traders were "probably reducing their exposure." Early in the session crude prices were under pressure after Germany, Europe's biggest economy, said it saw economic growth slowing, said Andy Lipow at Lipow Oil Associates. Last Thursday, weaker-than-expected data on US manufacturing and housing shook confidence in the recovery outlook for the largest economy, the world's biggest oil-consumer, pushing prices lower. While weaker US macroeconomic data weighed on prices, "the underlying fundamentals in the oil market itself remain very robust," Barclays Capital analysts said in a client note. "Similar to last August when markets got jittery from a bout of weak US macroeconomic data, current sentiment remains fixated on potential downside risk, however small or unlikely they may be, oblivious to tightening fundamentals in the background."