SINGAPORE, May 13 (Reuters) - Oil eased towards $112 on Friday, pressured by concerns over global crude demand, a strengthening dollar, and debt problems in the euro zone.
Brent crude
U.S. crude
"There are concerns China might be tightening too much, that demand might be falling and high prices might be starting to affect demand," said Tony Nunan, a risk manager with Mitsubishi Corp. in Tokyo.
The International Energy Agency, advisor to 28 industrialized nations, trimmed its global oil demand growth estimates for this year by 1.5 percent to 1.29 million barrels per day, noting gasoline pump prices near $4 a gallon prompt Americans to drive less. [ID:nLDE72E0Q3]
Investors were also concerned that China's battle with inflation may start to trim demand from the world's second largest oil consumer.
China's central bank raised the reserve requirements for commercial banks by another 50 basis points as it pursued a campaign to fight inflation despite initial signs of a slowing economy. [ID:nL3E7GC287]
Further pressure came from a strengthening dollar. Lingering worries about Greece's debt problems helped boost the dollar against the euro.
The dollar index, which measures the dollar's value against a basket of currencies, edged 0.18 percent higher to 75.373. The index had hit a three-week high of 75.645 on Thursday.
VOLATILITY TO CONTINUE
The market's rollercoaster ride over the past two weeks was likely to continue, with volatility expected to remain high in the short-term.
"Volatility is going to remain high until we see true fundamental strength and that will come with a drawdown in inventories in the United States during the peak summer driving season," Nunan said.
Trade volumes, which have been strong over the past week, held well above recent levels, with Brent trade 56 percent over the 30-day moving average and U.S. crude 35 percent over that average.
Open interests have swelled as well, with U.S. crude futures hitting a record 1.66 million on Wednesday. [ID:nN12462143]
According to technical charts, Brent futures are expected to fall towards $105.21 per barrel, while U.S. crude drops to $92.12, said Reuters market analyst Wang Tao. (Reporting by Randy Fabi)