(Reuters) - Brent crude rose on Friday, hovering above $115 a barrel, as a softer dollar tempered demand worries triggered by euro zone debt concerns and weak U.S. economic data.
The dollar fell across the board, hitting a record low against the Swiss franc and a three-year low versus the New Zealand dollar, with traders citing talk of dollar selling by model funds and U.S. banks, as well as Asian sovereign players.
"The immediate factor impacting crude's trade direction is the U.S. dollar, which is helping to support prices," Victor Shum, an analyst at Purvin & Gertz, said in Singapore. A softer dollar makes commodities priced in the greenback more attractive to consumers using other currencies.
"It's also the Memorial Day holiday in the U.S. on Monday, and most traders wouldn't want to be caught short over the long weekend."
Brent crude rose 28 cents to $115.33 a barrel by 3:51 a.m. EDT. U.S. crude was up 64 cents at $100.87, after falling more than 1 percent on Thursday.
"We expect to see low volume today and as long as the currency market stays this volatile this will have an influence in prices," Petromatrix's Olivier Jakob said.
The Group of Eight leaders fired a note of caution on prices on Friday, noting that while the global economic recovery was becoming more 'self-sustained', higher commodity prices are hampering further growth.
This, together with demand concerns stemming from the euro zone debt crisis and disappointing data from top energy consumer United States kept a lid on oil price gains.
Markets were spooked by the possibility of a Greek default after the head of euro zone finance ministers, Jean-Claude Juncker, said on Thursday the IMF could deny Greece the next tranche of aid.
"There's no question that the euro zone is adding to the volatility of crude futures. If the IMF appoints a new head quickly that might add some clarity to the situation which would support the euro and weaken the dollar," said Purvin & Gertz's Shum.
Weak economic data from U.S. overnight also sparked fresh concerns about oil demand.
Unexpectedly weak consumer spending hobbled the U.S. economy in the first quarter, with GDP coming in at an annual 1.8 percent which was less than expected, corporate profits shrank and there were fresh signs of a slowdown in the labor market - pointing to an uphill struggle for recovery.
(Additional reporting by Francis Kan in Singapore; Editing by Alison Birrane)
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