Oil futures closed out the week in higher territory Friday, boosted by a strong equities performance even as the US Dollar Index climbed to a 34-month high.
NYMEX June crude settled 86 cents higher at $96.02/b, after ranging from a low of a $94.79/b in electronic trading overnight to a peak of $96.45/b seen early in the US session, the highest price seen since May 9.
ICE July Brent also closed 86 cents higher to settle at $104.64/b. The front-month contract ranged between $103.35/b and $104.87/b Friday.
Analysts said that oil markets were being carried along by a strong stock market performance Friday, which was helping to counter bearish physical fundamentals as a result of little in the way of fresh macroeconomic indications and geopolitical developments.
"The equity market continues to stream along from record highs, and [oil] is detaching further from weak fundamentals," Gene McGillian, an analyst at Tradition Energy, said.
The Standard & Poor's 500 was up 0.63% at 1,660.91 at the 2:30 p.m. EDT (1830 GMT) NYMEX market settle, while the Dow Jones Industrial Average was 0.45% higher at 15,302.0.
Schneider Electric commodities analyst Jacob Corell suggested that the market could be "taking direction" from the higher equities markets "on an otherwise slow news day."
A price of "$104/b [on Brent] is pretty strong when you look at where we've been recently," Correll said. "Really, it's been pretty quiet [today] even on the geopolitical front, and the market is edging up from the lows."
Analysts said stronger recent consumer confidence numbers were also helping to drive the somewhat more bullish macroeconomic sentiment.
"We see a bit of a feedback loop at work here, as rising equity values are one component of the leading economic indicators and can help consumers feel better as well," Tim Evans, energy analyst at Citi Futures Perspective, said in a note.
"Higher equity values translate into stronger sentiment, leading to a further round of equity gains," he added.
The US Dollar Index bounced to a 34-month high of 84.371 during morning US trading as the dollar strengthened against a number of major international currencies overnight, including the yen, euro and Swiss franc.
"Although the US reported some soft economic data in recent days ... the market is going through one of its episodic periods where it flirts with the possibility that the [Quantitative Easing], which some had disparaged for being infinite, might end earlier than previously anticipated," Brown Brothers Harriman currency analyst Marc Chandler said in a note.
At the 2:30 p.m. EDT market settle, the Dollar Index was up 0.77% at 84.231.
Products were also higher Friday, with NYMEX June heating oil closing up 2.83 cents at $2.9370/gal, while ICE June gasoil was $7.50/mt higher at $879.25/mt at the NYMEX settle.
NYMEX June RBOB closed the day up 2.47 cents at $2.9069/gal after trading at over a five-week high of $2.9276/gal early in the US session. The front-month contract bounced in a flurry of trade immediately ahead of the market settle.
"Midwestern [gasoline] supplies are tight ... but stocks along the East Coast are more than ample," McGillian said, adding that players should be cautious in attributing recent Midwestern gasoline tightness to the stronger RBOB contract.
