Nymex oil turns lower; Brent at 9-month high

SAN FRANCISCO (MarketWatch) � Futures prices for West Texas Intermediate crude in New York turned lower Friday as the dollar strengthened against the euro, while Brent crude in London rallied to a nine-month high, as better-than-expected Chinese trade data bolstered expectations for higher oil demand.

Tensions in the Middle East region also contributed to the gains in Brent.

Crude oil for March delivery CLH3 �fell 39 cents, or 0.4%, to $95.44 a barrel on the New York Mercantile Exchange. Prices had traded as high as $96.57 and were more than 2% lower for the week.

Click to Play Europe week ahead: currency wars

Currency wars are likely to dominate the G-20 meeting in Moscow even if most countries will try not to make any explicit accusations.

�West Texas is revisiting the $95 handle today after a brisk dip yesterday,� said Richard Hastings, a macro strategist at Global Hunter Securities.

The euro has weakened against the dollar after stabilizing earlier Friday. Read more on currencies.

European leaders reached an agreement Friday on a seven-year budget plan for the European Union, according to announcement on Twitter. See: European leaders agree on 7-year EU budget deal.

The euro�s weakness against the greenback �forces the dollar higher against oil, so oil prices are under pressure,� said Hastings. A stronger dollar makes dollar-denominated commodities such as oil more expensive for holders of other currencies.

Brent full speed ahead

Meanwhile, London-traded March Brent crude UK:LCOH3 � rallied $1.56, or 1.3%, to $118.80 a barrel on ICE Futures after tapping a high of $119.17. Prices haven�t closed above $118 since May, according to FactSet.

Friday�s gains were fueled by rising optimism over China�s economic outlook, after trade data for January showed exports jumped 25% and imports climbed 28.8% from the year-ago period, giving the country a trade surplus of $29.2 billion. All three figures beat market expectations. See: China data help lift most Asia stocks.

�The pattern of recent days thus remains unbroken, with market players responding to falling prices by taking the opportunity to buy. China�s sound import data are also a support for oil,� analysts at Commerzbank said in a note. �In addition, the reduction in Saudi Arabian oil output is probably likewise boosting prices,� they added.

Reuters Enlarge Image Better-than-expected China trade data fuel expectations for higher oil demand.

Saudi Arabia cut its output to 9.25 million barrels per day in January from 9.45 million in December, according to a Platts survey of OPEC and oil-industry officials and analysts released late Thursday.

Oil production from the Organization of the Petroleum Exporting Countries, overall, fell to 30.45 million barrels per day in January from 30.65 million, the Platts survey showed.

In the Middle East and North Africa region, tensions remained high.