New York: Oil prices jumped on Friday, heading for their first positive week in three, as the dollar fell on interest-rate uncertainty, lifting demand for dollar-denominated commodities from holders of other currencies.
Benchmark Brent oil was up more than 1 percent, while U.S. crude jumped more than 4 percent in New York morning trade, shrugging off weakness from the European session.
Traders said U.S. crude was showing more momentum ahead of the expiration of its front-month contract.
Oil could gain further in the afternoon if U.S. oil rig count data from private firm Baker Hughes at 1 p.m. EDT (1700 GMT) shows another sharp decline, which may point to lower production in the future. A smaller-than-expected count could undercut Friday`s rally.
"The Baker Hughes numbers could certainly be pivotal to afternoon trade, but for now, all eyes are on the dollar and the euro, keeping with the stronger relationship between oil and currencies the past few days," said Joseph Posillico, senior vice president of energy futures at Jefferies in New York.
The dollar was lower on Friday on expectations, spurred by a Federal Reserve statement on Wednesday, that U.S. interest rates will rise more slowly than expected.
The euro rose against the dollar after the leaders of Greece and Germany struck a conciliatory note over efforts to keep Greece in the euro zone.
Brent`s front-month May contract was up 70 cents at $55.13 a barrel at 11:22 a.m. EDT (1522 GMT), after a session low of $53.55. The contract is set for a 1 percent gain on the week after two weeks of declines.
U.S. crude`s expiring front-month, April, rose $2.04 to a session high of $46 a barrel. The spread between April and nearby May, which will become the front-month for U.S. crude from Monday, was at just over $1 a barrel, indicating further gains for April before Friday`s settlement.
Brent`s spread with U.S. crude, one of the biggest volume trades in oil, was at around $8 a barrel, though technical analysts said it could blow out to above $30 over time.
Aside from the dollar and the oil rig count, traders were also watching intensive efforts by world powers to clinch a nuclear deal with Iran. Tehran plans to raise its oil exports, now curtailed by sanctions related to its nuclear program, once it strikes a deal.
