Oil neared a one-month peak today on the back of a weak dollar, but ran out of steam as traders digested demand forecast downgrades from the International Energy Agency and the OPEC oil cartel.
Brent North Sea crude for delivery in November rallied as high as $113 per barrel, reaching the highest level since 16 September. It stood at $111.25 in late afternoon trade, up 52 cents from yesterday's closing level.
New York's main contract, light sweet crude for November, dipped 44 cents to $85.37 per barrel, reversing earlier gains.
The European single currency soared to a three-week dollar high today as markets expected Slovakia to eventually back expansion of a euro zone bailout fund despite lawmakers initially voting against it.
It later pulled back after European Commission President Jose Manuel Barroso called for an urgent recapitalisation of European banks amid ongoing turmoil over the eurozone sovereign debt crisis.
A weaker greenback makes dollar-priced crude cheaper for buyers using stronger currencies. This tends to stimulate demand and support higher oil prices.
