Oil prices lower

Oil prices slipped on Friday as the euro zone's debt crisis and dimming hopes for US monetary stimulus reinforced concern about petroleum demand, but disappointing talks between Iran and the UN's nuclear agency limited losses. The intraday recovery allowed both Brent and US crude to post weekly gains, snapping a string of five straight weekly losses.
The euro recovered from lows and was on track to end five weeks of losses versus the dollar, but the single currency felt pressure after Thursday's downgrade to Spain's credit rating and on the signs of economic weakness in Italy and Germany. The stronger dollar added pressure to dollar-denominated oil prices.
Another round of disappointing talks between the UN International Atomic Energy Agency and a fire at Shell's oil sands upgrader in Alberta helped oil prices recover from session lows. Federal Reserve Chairman Ben Bernanke's Thursday appearance before a congressional committee offered little encouragement to investors hoping the Fed would launch a third round of bond buying, or quantitative easing.
"The oil market faces an uncertain weekend, especially with respect to the expected bailout request for the Spanish bank and key economic data from China," said John Kilduff, partner at hedge fund Again Capital LLC in New York. "An almost worse-case scenario was priced in this morning, but dimmed prospects surrounding the Iran nuclear talks and the fire at a Shell upgrader in Alberta reminded everyone of the risk of going into the weekend aggressively short the market."
Brent July crude fell a second day, dipping 46 cents to settle at $99.47 a barrel, well above its $97.19 intraday low. A 1.06 percent gain for the week avoided a sixth consecutive weekly loss, which would have been the longest string of weekly declines since 2002. Brent prices had recovered above the $100 level during the week after slumping to a 16-month low of $95.63 on Monday.
US July crude slipped 72 cents to settle at $84.10, after falling as low as $82. A 1.05 percent gain for the week also snapped a string of five straight weekly losses. A sixth down week would have been the longest string of weekly losses since 1998. Brent's premium to US crude increased 26 cents to $15.37 a barrel, based on settlements. Total trading volumes were above 30-day averages for both Brent and US crude.
Money managers raised their net US crude futures and options positions in the week to June 5, data from the Commodities Futures Trading Commission showed. While US stocks rallied, global equities were pressured by the euro zone turmoil. Spain this weekend is expected to request a financial package to prop up its troubled banks. US President Barack Obama said European leaders face an "urgent need to act" to resolve the region's financial crisis.
Spain is expected to request assistance for its troubled banks soon, European Central Bank Vice President Vitor Constancio said. On Thursday, crude prices shot up intraday after a surprise interest rate cut in China, but the boost faded when investors decided it signalled real concern about an economic slowdown in the world's No 2 oil consumer.
May economic figures are due this weekend, including CPI and trade data. Chinese inflation is expected to have cooled further in May and factory output growth is set to come in not far from three-year lows, Reuters polls showed. Talks on Friday between UN International Atomic Energy Agency and Iran resulted in no progress toward an agreement on allowing inspectors access to key facilities, the IAEA said.