MW: Oil futures edge higher but demand concerns weigh
By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) -- Oil futures traded marginally higher early Monday following their decline in the previous session, but concerns over weak demand persisted and limited gains.
Crude oil for March delivery rose 12 cents, or 0.1%, to $71.31 a barrel in electronic trading on Globex.
Earlier, the contract rose to intraday high of $72.39 a barrel, but subsequently gave up nearly all of its gains.
"It's a corrective bounce" after the sharp declines seen at the end of last week, said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt.
Fritsch expects oil prices to test the $70 level during this week "given continued weakness in fundamental data, a stronger U.S. dollar and falling risk appetite."
Oil prices dropped 2.7% on Friday, as the U.S. dollar rose to an 8-month high against the euro, pressuring dollar-denominated commodity prices.
Traders also digested economic news on Friday. The Labor Department reported that the U.S. unemployment rate fell to 9.7% in January from 10% in December.
However, nonfarm payrolls dropped by 20,000 in January, while economists had expected a small increase.
On Monday, the dollar rose against its rivals, particularly the British pound.
The dollar index (DXY 80.37, -0.08, -0.09%) , which tracks the performance of the greenback against a trade-weighted basket of six major currencies, traded at 80.383 compared with 80.460 in North American trading late Friday.
Dollar strength typically weighs on oil prices, because it makes the commodity more expensive for holders of other currencies.
