(Updates prices, adds comment)
LONDON, April 4 (Reuters) - Oil rose $1 a barrel on Friday,
bouncing back from losses in the previous session as investors
focused back on a weakening U.S. dollar and the U.S. economic
outlook.
U.S. crude <CLc1> rose $1.06 to a session high of $104.85 a
barrel mid-morning but later pared gains to stand at $104.75 at
1107 GMT. London Brent crude <LCOc1> was up 84 cents to $103.36.
Despite the rally, analysts say prices could soon fall
sharply if demand in the United States -- the world's top oil
consumer -- continues to fall.
"Crude oil has already had an amazing run that has realised
a great deal of its upward potential, leaving it at an increased
risk of a substantial decline," Tim Evans, an analyst at
Citigroup, said in a report on Friday.
"Weak U.S. demand for petroleum has become a consistent
market feature."
U.S. crude has climbed $40, or 63 percent, in the last
year.
Recently revised monthly data for January showed U.S. demand
was even weaker than initially reported, with the new figure
standing at 20.1 million barrels a day, which was 2.2 percent
less than in January 2007, Citigroup noted.
The January figure was the lowest monthly demand level since
April 2005, it added.
U.S. oil consumption is falling as soaring energy prices
trouble consumers already hit by a credit crunch and housing
slump.
Oil fell on Thursday after U.S. government data showed
jobless claims last week had risen to their highest since 2005,
signalling that the U.S. economy was deteriorating.
The dollar ticked lower versus other major currencies on
Friday in technically-led trade ahead of a U.S. jobs report
which will further shape perceptions of U.S. oil demand and
affect the dollar.
Economists predict the U.S. economy likely cut 60,000 jobs
in March for its third straight month of losses, with the
unemployment rate seen rising to 5.0 percent, from 4.8 percent
in February. []
The dollar's weakness has boosted oil and other commodities
denominated in the currency as investors pour money into the
asset class to hedge against inflation.
U.S. oil demand is lagging last year's as soaring energy
prices trouble consumers already hit by a credit crunch and
housing slump.
In Nigeria, Royal Dutch Shell <RDSa.L> said on Friday that
it had put out a fire at a major oil export pipeline five days
after it started, and that output and exports were unaffected.
[]
(Reporting by Margaret Orgill, additional reporting by Ikuko
Kao, editing by Alex Lawler)
