Brent, crude rise

Brent crude edged up and US crude pushed above $112 a barrel on Thursday in volatile trading ahead of a long holiday weekend on lift from the dollar's weakness. Investors bought oil as a hedge against the slumping dollar, which fell for a third straight day, hitting its lowest since 2008 against a basket of currencies. The dollar index neared an all-time low.
Disappointing reports on factory activity and US initial jobless claims cast doubt on the pace of US economic recovery and energy demand growth, limiting oil's gains. Brent crude for June rose 14 cents to settle at $123.99 a barrel, having earlier pushed up nearly $1 to $124.81, the highest since April 11. US crude for June rose 84 cents to settle at $112.29, bouncing off a session low of $111. US crude posted a 2.4 percent weekly gain.
US gasoline futures ended at $3.3086 a gallon, the highest settlement since July 2008 as the summer driving season approaches. US heating oil futures ended lower. With gasoline prices already $4 a gallon in some states, the Obama administration unveiled a working group of federal agencies to probe potential fraud in the energy markets.
Brent crude's premium to its US counterpart narrowed by 68 cents to $11.72 a barrel by 3:39 pm EDT (1939 GMT) in post-settlement trading. "Brent has lost a little momentum in its rally," said Gene McGillian of Tradition Energy in Connecticut. "But it's still got a big advantage to US crude and that spread is unwinding a bit now."
Oil markets in the United States and Europe will be shut on Friday for a holiday. For details click on. The dollar weakened this week after Standard & Poor's cut its outlook for US government debt to negative, leading some foreign exchange analysts to tout the euro's potential as an alternative reserve currency.
Both Brent and US prices had rallied on Wednesday after the US government reported crude oil and refined products inventories fell. Threats to supply in Africa and the Middle East remain and election turmoil in Nigeria and unrest in Yemen kept the uncertainty in focus.
Muammar Qadhafi's forces attacked a rebel-controlled oil pumping station in eastern Libya, an official with an insurgent-run oil company said. A note of caution about oil demand was sounded by a report showing that while US initial jobless benefit claims fell last week, they stayed above the key 400,000 level, indicating possible loss of momentum in any jobs recovery. The International Energy Agency's Chief Economist Fatih Birol said oil producing nations need to reassure the market after unrest in the Middle East and worries about supply disruptions pushed crude prices higher.