Oil prices slipped below $85 a barrel in seesaw trade on Monday, as high U.S. inventories outweighed early support from strong Chinese crude imports and a weak dollar, according to Reuters. U.S. crude for May delivery fell 31 cents to $84.61 a barrel by 1:22 p.m. EDT (1722 GMT). London Brent crude rose 11 cents to $84.94, moving to a premium above U.S. crude, also known as WTI, for the first time in months. "The current oversupplied (oil) markets are providing an increasingly sharp contrast to longer-term bullish expectations that continue to be spun off of an up-trending stock market," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois. Brent crude prices "have moved higher this morning, to just above $85 a barrel, as increased flows of Canadian crude flow into PADD 2 (U.S. Midwest), weighing on WTI prices and steepening the forward curve," a report from J.P. Morgan said on Monday. Early support for crude came as Euro zone finance ministers approved a giant 30 billion euro ($40 billion) emergency aid mechanism for debt-stricken Greece on Sunday but stressed Athens had not requested the plan be activated yet. The news drove the euro to its highest level against the dollar in nearly a month. A weak dollar can denote a move by investors away from the dollar to assets deemed riskier such as commodities or equities and tends to support crude prices. Chinese crude imports jumped 13.8 percent from the previous month and reached 4.95 million barrels a day, preliminary data released by the General Administration of Customs showed. "The weaker dollar and strongly bullish Chinese data should be very positive for oil," said Daniel Briesemann, commodities analyst at Commerzbank. "Of course fundamentally, these high oil prices cannot be justified, but based on sentiment, the market still has room to go up, we think." Technical chart analysts said the oil market was running out of upward momentum after a sharp rise in prices at the end of March and in early April. The pull-back came despite factors that analysts said were supportive for the market. TARGET $90? "International demand ... is having a more positive impact on Brent than WTI," said Christopher Bellew, broker at Bache Commodities. "U.S. crude oil stocks are high and WTI has its limitations as an (international) marker price because it is based on a landlocked crude, well away from the coast." The last time Brent futures traded consistently above U.S. crude was in December. China's strong demand for oil and copper showed no let-up in March, with imports rising rapidly despite higher prices as factories returned to work in earnest after the long Lunar New Year holidays. In a sign of upbeat sentiment, open interest positions were heavier at the NYMEX May $90 call option and the $80 and $75 put options, according to Reuters data on Friday. Money managers also extended net crude oil long positions on the New York Mercantile Exchange to a record 186,732 in the week to April 6, up from 169,478 in the previous week, the Commodity Futures Trading Commission said on Friday.
