Oil climbs in volatile trading

NEW YORK: Oil prices edged higher in highly volatile trading as traders continued to fret over supply and demand and the weakness of the US dollar.

New York's main oil futures contract, light sweet crude for July delivery, rose 36 cents to close aat 136.74 dollars a barrel yesterday.

In London, Brent North Sea crude for July delivery jumped 1.07 dollars to settle at 136.09 dollars.

The market seesawed sharply, losing more than five dollars a barrel in early trading yesterday before staging a late rally.

The greenback jumped yesterday against other major currencies after the US government reported retail sales surged a stronger-than-expected 1.0 per cent in May, and core retail sales, which strip out vehicle sales, increased by 1.2 per cent.

The report pointed to signs of strength in consumer spending, the main driver of the US economy, bolstering the dollar.

"Oil futures are lower as the dollar strengthened," said Sucden analyst Nimit Khamar in London.

"Oil markets have been increasingly influenced by the dollar over the past year, as market participants have been using dollar-denominated commodities as a hedge against inflation and their dollar exposure," he said.

However, other analysts pointed out that the movement of the dollar was not necessarily directly influencing oil prices.

The New York oil contract had rocketed by 5.07 dollars to a close of 136.38 dollars on Wednesday after publication of the US energy report that showed American crude reserves dipped for a fourth consecutive week.