UPDATE 4-Oil falls below $85 on demand doubts, dollar

                                
 * ICE Brent trades above U.S. crude after May expiry jump
                                
 * U.S. crude prices pressured by dollar, equities
                                
 * Coming Up: U.S. housing starts for March; 1230 GMT
                                
 
                                
 (Adds quote, equities news, updates prices)
                                
 By Joe Brock
                                
 LONDON, April 16 (Reuters) - Oil prices fell below $85 a
barrel on Friday as doubts over U.S. crude demand re-emerged and
the dollar strengthened, making imports more expensive for
emerging economies where consumption is surging.
                                
 The dollar <.DXY> gained 0.2 percent against a basket of
currencies on Thursday, while European stock markets were
sluggish following Asian equity losses. [ID:nLDE63F0G2]
                                
 U.S. crude for May delivery <CLc1> fell 94 cents to $84.57 a
barrel by 1105 GMT, more than $2 lower than an 18-month high
above $87 reached last week.
                                
 "The dollar is a bit stronger and equity markets are not too
friendly today and that is having a negative impact (on oil
prices)," said Eugen Weinberg, oil analyst at Commerzbank in
Frankfurt.
                                
 "We've seen this for the last month that oil prices are more
affected by macro factors impacting sentiment rather than
fundamental factors," Weinberg added.
                                
 An unexpected jump in the weekly number of U.S. workers
filing new jobless benefit claims raised doubts over the
strength of economic recovery in the world's largest energy
consumer, weighing on oil prices. [ID:nN15325702] 
                                
 The May London Brent <LCOc1> crude oil contract reached
18-month highs just before it expired on Thursday, jumping to a
premium over the front-month U.S. crude contract of over $1.60.
                                
 The June contract, now the front-month contract, was trading
about $1 higher than the equivalent contract for U.S. crude on
Friday, shedding 76 cents to $86.83.
                                
 
                                
 BRENT VS U.S. CRUDE
                                
 For a graphic on the price movements of Brent and U.S.
crude's front-month contracts, click below:
  
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 http://graphics.thomsonreuters.com/10/04/OIL_USBC0410.gif
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 Strong economic data out of China painted a more positive
outlook for demand across Asia, giving relative support to
prices of Brent crude, the benchmark for most of the oil
produced in Europe, Africa and Asia.
                                
 May Brent settled at $87.17 on Thursday, the highest close
since front-month Brent ended at $90.25 on Oct. 3, 2008. Brent's
$87.58 intraday peak was the highest since $87.99 was struck on
Oct. 7, 2008. For a factbox on Brent's premium: [ID:nN12201326]
                                
 Barclays Capital's technical team said in a note to clients
that a corrective phase that had dominated the last week or so
of oil trading was now over and the next targets were
significantly higher. [ID:nLDE63E25S]
                                
 "Following five days of modest lower closes, Brent crude is
pressuring the top of a bullish flag-like pattern," Barclays
Capital said. Brent is ready to test $88.15 per barrel, then
$90.00.
                                
 For a technical outlook on U.S. crude, click [ID:nSGE63F02L]
 (Additional reporting by Alejandro Barbajosa in Singapore;
editing by James Jukwey)