By Felicia Loo
SINGAPORE, April 25 (Reuters) - Oil retreated to under $116
a barrel on Friday, as a stronger dollar ignited a sell-off and
investors shifted cash to equities, but concerns over supply
disruptions limited losses.
U.S. light crude for June delivery <CLc1> dropped 46 cents
to $115.60 a barrel by 0107 GMT, extending a loss of $2.24 a
barrel on Thursday in New York.
Prices have weakened 3.6 percent from the record high of
$119.90 a barrel touched on Tuesday. A sliding greenback
devalues U.S. dollar-denominated financial assets, prompting
funds to move into oil and other commodities.
"The risks of an economic slowdown in the European Union
caused the selling of the euro against the dollar," said Tetsu
Emori, fund manager at Astmax Co Ltd in Tokyo.
The dollar steadied against the euro and the yen, holding
firm after data the previous day showed signs of resilience in
the U.S. labour market. []
The euro stayed away from its record high of $1.6020 hit on
Tuesday, weighed down by weak economic growth data in Germany
and France -- the euro zone's two biggest markets. The euro was
seen at $1.5676 <EUR=>.
European Central Bank policymaker comments on excessive
volatility in currency exchange rates added fuel to fire,
triggering a sell-off in the single European currency.
Oil and other dollar-denominated commodities came under
pressure after data showed U.S. jobless claims down sharply
last week, boosting the dollar by more than 1 percent against a
basket of major currencies. <=USD>
Gold, copper and agricultural products also fell as the
dollar gained.
Prices retreated as the market expected a rise in gasoline
output from refineries in the United States, the world's No. 1
energy user, to meet peak driving demand.
U.S. government data on Wednesday showed refinery
utilization rates jumped by 4.2 percentage points to 85.6
percent of capacity.
But the summer driving season, starting from late May, is
expected to see weaker gasoline demand compared with previous
years due to an overall sluggish U.S. economy.
Production disruptions in Nigeria helped moderate oil's
pullback, and a planned two-day strike at a Scottish refinery
that could affect 700,000 barrels per day of North Sea crude
supplies also supported oil.
Talks to resolve a pension dispute at the 200,000 bpd
Grangemouth refinery collapsed late on Wednesday, and union
officials said the work stoppage will proceed on Sunday.
The refinery has been closing gradually over the last week
and its power station, which also supplies BP's nearby Kinneil
Forties crude oil processing plant, is due to shut on Saturday.
Rebel attacks have shut 169,000 bpd of Royal Dutch Shell
<RDSa.L> in Nigeria. In Libya, 45,000 bpd of Libyan offshore
oil production had been halted due to a technical problem and
could be offline for a few weeks.
(Editing by Ben Tan)
