Oil pared gains to trade little changed in New York on concern a slowing economic recovery will erode demand for fuels in the US, the world's biggest crude consumer.
Crude had fallen in the past four days, losing 4.6 per cent.
Twenty-seven of 58 economists polled by Bloomberg News this month see US economic growth in 2011 below the 2.5 per cent to 2.8 per cent pace Federal Reserve policy makers peg as the long- term trend. US oil inventories were at 357.4 million barrels in the week to September 10,th the most for that time of the year in the past five years, according to the Energy Department.
"The still historically high inventories today are going to put a lid on any surge," said Victor Shum, a senior principal with Purvin and Gertz in Singapore. "This points to range-bound trading in the near term, with the low $70s showing quite a bit of support."
The October contract was at $73.73 a barrel, up 7 cents, at 2.47pm Singapore time in electronic trading on the New York Mercantile Exchange. Prices earlier climbed as much as 36 cents, or 0.5 per cent, to $74.02.
Futures lost 3.7 per cent last week, the biggest decline since the week ended August 13, after Enbridge Energy Partners LP restarted a US pipeline that sends Canadian oil to refineries in the Midwest.
The October Nymex contract is expiring tomorrow. The more active November future was at $75.10 a barrel, up 18 cents.
"At times like this, oil tends to reflect things like movements in the dollar and maybe some short-term investor behaviour," said Ben Westmore, a minerals and energy economist at National Australia Bank in Melbourne. "The opening up of Line 6A probably didn't help prices."
Crude may fall this week after the restart of Enbridge's pipeline, a Bloomberg News survey showed. Twenty-four of 46 analysts, or 52 per cent, forecast prices will decline through September 24th. Seventeen respondents, or 37 per cent, predicted little change, and five estimated prices will rise. Last week, 55 per cent said crude would decrease.
Crude gained as much as 0.5 per cent earlier today after the dollar dropped toward a five-week low against the euro, increasing the investment appeal of commodities.
The dollar slipped to $1.3102 per euro from $1.3050 in New York on September 17th, when it also touched $1.3159, the weakest level since August 11th. The US currency also weakened versus most of its major counterparts on speculation the Federal Reserve will tomorrow signal it is moving closer to taking further measures to keep borrowing costs low.
Brent crude oil for November settlement gained as much as 44 cents, or 0.6 per cent, to $78.65 on the London-based ICE Futures Europe exchange. The contract was at $78.25 a barrel.
Bloomberg