>Crude down on firmer dollar; fundamentals weak

Singapore - Crude oil futures drifted lower Friday in Asia as the dollar strengthened, presenting a disincentive to stay long on contracts, while traders also opted to take profit as weak fundamentals continued to cast doubts over the market's outlook. While oil prices have held steady near the psychologically important $50-a-barrel mark in recent trading, with sentiment finding support from firming equity markets, analysts warned that downside risks persisted. "Overall, we continue to have difficulty building a bullish case," said Jim Ritterbusch, president at trading advisory firm Ritterbusch and Associates. "But, at the same time, we are recognizing the recent resiliency of the complex amidst seemingly bearish headlines, particularly in the form of mounting and burdensome crude supplies." On the New York Mercantile Exchange, light, sweet crude for delivery in May traded at $49.64 a barrel at 0635 GMT, down 34 cents or 0.7% in the Globex electronic session. June Brent crude on London's ICE Futures exchange lost 5 cents to $53.01 a barrel. The dollar earlier traded firmer against the euro and the yen, rising to Y99.52 from Y99.33 late in New York; the single currency traded at $1.3128, from $1.3175. Oil prices came under renewed pressure Wednesday following U.S. government oil data that showed the country's crude inventories rose a fifth straight week to 366.7 million barrels - the highest since September 1990. Stockpiles have climbed almost 17% on year despite efforts by the Organization of Petroleum Exporting Countries to aggressively cut output, suggesting demand has failed to keep pace.

Given the recent positive performance of equities - Asian shares traded higher ahead of the weekend - as well as some bright spots in the global economic growth picture, energy and precious metals markets may be "running out of favor" with investors, according to Barclays Capital. "The flow of investments into oil (exchange-traded products) has reversed sharply," analysts led by Gayle Berry said in an overnight report. "With the financial market environment now less positive for gold and oil inventory levels rising sharply, further investment outflows from these sectors look likely." At 0635 GMT, oil product futures also traded lower. Nymex heating oil for May fell 82 points to 141.36 cents a gallon, while May reformulated gasoline blendstock traded at 147.25 cents, down 18 points. ICE gasoil for May changed hands at $454.25 a metric ton, slipping $2.75 from Thursday's settlement.

Source : COMMODITIESCONTROL