* Dollar weakness supportive to oil, other commodities
* Brent lifted by rising euro zone business morale
* Data showing rising stockpiles weighs on U.S. oil
* Coming up: CFTC positions data, 3:30 p.m. EST Friday
(Recasts, updates prices and market activity, changes byline
and moves dateline from previous LONDON)
By Robert Gibbons
NEW YORK, Jan 21 (Reuters) - ICE Brent crude futures rose
on Friday on lift from rising German and French business
sentiment which boosted the euro to a two-month peak against
the dollar while U.S. oil stalled near $89 in choppy trading.
German business morale jumped to its highest level in 20
years in January, surging past economists' forecasts, according
to the Munich-based Ifo economic institute. while French data
showed business confidence also rose. []
The euro rose to a two-month high versus the dollar, helped
by Asian demand and the improved confidence in the euro zone.
[]
U.S. oil prices slipped as the rising oil stockpiles
reported during the previous session curbed an earlier advance
on the dollar's weakness.
In London, ICE Brent crude for March <LCOc1> rose 57 cents,
or 0.59 percent to $97.15 a barrel at 12:05 p.m. EST (1705
GMT).
U.S. crude oil for March delivery <CLc1> fell 49 cents to
$89.10 a barrel.
Both the Brent and U.S. crude contracts were on track to
post weekly losses. The Brent contract pushed above $99 a
barrel last Friday, as the Brent February crude contract
expired.
U.S. crude prices had a sharp price retreat on Thursday,
triggered by the inventory builds and concerns China may take
more measures to cool stubborn inflation, resulting in slower
growth in demand for oil and other commodities.
U.S. crude oil inventories rose 2.62 million barrels last
week, against a forecast that stockpiles would be lower, and
refined products stocks increased more than expected, the U.S.
Energy Information Administration said on Thursday. []
But the dollar's weakness and the business sentiment data
in the euro zone were able to limit U.S. oil's losses and did
lift prices earlier on Friday.
"A combined move with the weaker dollar and improving
business confidence in Germany is supporting oil. On Thursday
we saw a very strong support point... We could see a test of
the upper level, which is $99.20 for Brent," said Thorbjorn Bak
Jensen, an analyst at A/S Global Risk Management Ltd.
Despite the shifts to new front-month contract's this week,
Brent futures have stayed at an unusually strong premium to
U.S. crude.
Brent's premium to U.S. benchmark West Texas Intermediate
crude <CL-LCO1=R> topped $8 a barrel intraday on Friday, just
below last week's $8.24, which was the widest since February
2009.
"The spread is starting to get rather stretched and when it
does get rather stretched there is usually a sharp correction
at some point," said Michael Hewson, a market analyst at CMC
markets.
(Additional reporting by Gene Ramos in New York and Jessica
Donati in London;editing by Sofina Mirza-Reid)
