Oil prices edged up this evening as a weak US dollar and turmoil in North Africa and the Middle East offset lingering concerns about slowing US economic growth and the threat to demand from high prices.
Both U.S and Brent crude bounced from early dips after euro zone data showed the inflation rate rose further above the European Central Bank's target in April. The data increased the chances of another interest rate rise in the euro zone in June and helped push the dollar index against a basket of major currencies to a three-year low.
Brent crude rose 45 cents to $125.47 a barrel, while US crude rose 25 cents to $113.11.
Higher interest rates in Europe compared to the US have undermined support for the US dollar, pushing up the euro by 11% so far this year. A weaker dollar makes oil cheaper for holders of other currencies, and usually pushes up demand.
Meanwhile, Libya's conflict spilled beyond its borders as forces loyal to leader Muammar Gaddafi attacked the Tunisian town of Dehiba, near the Libyan border. Morocco, which borders oil and gas producer and OPEC-member Algeria, said a bomb that killed at least 14 people on Thursday was a terrorist act.
