Oil futures are in retreat as the week ends, with a dip in equity values and a rise in the dollar against the euro affecting sentiment in crude markets In London, January-delivery Brent traded down on Friday to around $76.85/b, a fall of 1% from Thursday and well beneath the highs of more than $80/b seen in recent weeks. There are also fundamental reasons why the price should be weakening. Demand is still struggling to significantly reduce stocks. Notwithstanding a 0.9m barrel fall in US inventories last week, to 336.8m barrels, the country's crude stocks remain historically high. Gasoline and distilates inventories are also still well above the seasonal average, at 209.1m barrels and 167.4m barrels respectively. That is not preventing some analysts predicting a stronger rise in the oil price as the global economy recovers and big consumers, especially China, resume rapid oil buying. One large bank now privately forecasts an average price of $85/b next year and $115/b in 2011.

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