By early afternoon in Europe, benchmark crude for May delivery was up 84 cents to $86.23 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 49 cents to settle at $85.39 on Thursday.
“The oil market is behaving the same way as we have seen during the past several weeks: 'one step back, two steps forward,”' said a report from Commerzbank in Frankfurt.
“Supported by benign equity markets, sustained bullish sentiment and a slightly weaker US dollar, the oil price recouped the losses of the previous two days.” Discounter Target Corp., department store Macy's Inc., clothier Gap Inc. and Victoria's Secret parent Limited Brands Inc. posted Thursday double-digit increases in March sales that beat Wall Street analysts' expectations.
Overall, sales in stores open at least a year rose 9 percent in March, based on an index of 31 retailers compiled by the International Council of Shopping Centers.
Oil had bounced between $69 and $84 for about nine months before spurting to above $87 earlier this week.
“The strong retail sales are a part of the positive economic news coming out of the US over the last few weeks,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. “That's what's been supporting the break out in oil prices.” Crude was also boosted by investor expectations that China might allow its currency to rise, which would make dollar-based commodities such as oil cheaper for investors with yuan and might increase demand.
A softer dollar also helped push oil prices higher by making crude cheaper for investors holding other currencies.
The euro rose to $1.3404 in European trading Friday from $1.3353 late Thursday in New York, while the British pound rebounded to $1.5357 from $1.5274.
In other Nymex trading in May contracts, heating oil added 2.07 cents to $2.2489 a gallon, and gasoline gained 1.34 cents to $2.3117 a gallon. Natural gas rose 3.9 cents to $3.948 per 1,000 cubic feet.
In London, Brent crude was up 96 cents at $85.77 on the ICE futures exchange.
