* Dollar index nears all-time low
* U.S. jobless claims down less than expected
* Coming up: Oil markets shut Friday ahead of Easter
(Recasts, updates prices, market activity to settlement)
By Robert Gibbons
NEW YORK, April 21 (Reuters) - Brent crude edged up and
U.S. crude <CLc1> 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
<.DXY> neared an all-time low.
Disappointing reports on factory activity and U.S. initial
jobless claims cast doubt on the pace of U.S. economic recovery
and energy demand growth, limiting oil's gains.
Brent crude for June <LCOc1> rose 14 cents to settle at
$123.99 a barrel, having earlier pushed up nearly $1 to
$124.81, the highest since April 11.
U.S. crude <CLc1> for June rose 84 cents to settle at
$112.29, bouncing off a session low of $111. U.S. crude posted
a 2.4 percent weekly gain.
U.S. gasoline futures <RBc1> ended at $3.3086 a gallon, the
highest settlement since July 2008 as the summer driving season
approaches. U.S. heating oil futures <HOc1> 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 U.S. counterpart <CL-LCO1=R>
narrowed by 68 cents to $11.72 a barrel by 3:39 p.m. 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 U.S. 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 [].
U.S. DOLLAR SWOON
The dollar weakened this week after Standard & Poor's cut
its outlook for U.S. government debt to negative, leading some
foreign exchange analysts to tout the euro's potential as an
alternative reserve currency. []
A weaker dollar can lift dollar-denominated oil prices by
making oil less expensive for consumers using other currencies
and by drawing investment away from foreign exchange markets
seeking better returns.
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Graphic on inverse correlation between oil and dollar:
http://link.reuters.com/pyd29r
To view EIA's weekly crude figures, click here:
http://www.eia.gov/dnav/pet/pet_move_wimpc_s1_w.htm
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Both Brent and U.S. prices had rallied on Wednesday after
the U.S. government reported crude oil and refined products
inventories fell. []
AFRICA/MIDDLE EAST TURMOIL
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 Gaddafi's forces attacked a rebel-controlled oil
pumping station in eastern Libya, an official with an
insurgent-run oil company said. []
JOBLESS CLAIMS, FACTORY DATA DISAPPOINT
A note of caution about oil demand was sounded by a report
showing that while U.S. initial jobless benefit claims fell
last week, they stayed above the key 400,000 level, indicating
possible loss of momentum in any jobs recovery.
[]
Also a concern, the pace of U.S. Mid-Atlantic region
factory activity fell more than expected in April. It expanded
in March at its fastest pace in 27 years. []
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. []
(Additional reporting by Emma Farge in London and Francis Kan
in Singapore, and Joshua Schneyer and Gene Ramos in New York;
Editing by John Picinich and David Gregorio)
