Oil prices rally before weekend

World oil prices rallied on Friday, supported by rising European stock markets and a weaker dollar as investors drew comfort from a successful Spanish bond auction and upbeat German data. Brent North Sea crude for June gained $1.21 to $119.21 per barrel in London late afternoon deals. New York's main contract, West Texas Intermediate (WTI) crude for delivery in May added $1.61 to $103.88. "Crude oil prices rebounded on Friday ... tracking gains in the European equity markets, especially after the successful Spanish debt auctions results," said Sucden analyst Myrto Sokou. "Brent crude oil climbed higher above $119 per barrel, while WTI crude oil traded around $103 per barrel, supported by the softer US dollar against the euro. "Due to the absence of major economic data today, we expect a quiet trading session with low volumes while currency movements might give some direction." Sokou added: "However, investors should remain cautious as the economic situation across the eurozone look fairly fragile at the moment." The European single currency rose against the dollar on the back of rising German business confidence and following Spain's bond auction on Thursday. The weaker US unit makes dollar-priced crude cheaper for buyers using stronger currencies and this tends to stimulate demand and spark higher oil prices. Spain -- one of the eurozone's debt-strapped economies -- paid a higher borrowing rate in a key auction of 10-year bonds on Thursday but managed to keep it below the psychologically key six percent level. Rates above 6.0 percent are generally perceived to be unsustainable over the longer term. "Eurozone worries eased on strong investor demand for Spanish bonds and as the recent price slump encouraged fresh buying," Phillip Futures said in a market commentary. However, a slew of weak economic data from the United States also weighed on financial markets this week. US Labour Department figures released on Thursday showed initial jobless claims fall by 2,000 to 386,000 in the week ended April 14, far short of the 375,000 expected by analysts, raising concerns over the recovery of the country's beleaguered labour market. Existing home sales also fell by 2.6 percent in March from February, below analyst expectations, the National Association of Realtors said.