Oil rose on Friday as the dollar weakened, after jobs and business activity data signaled the U.S. economy would require additional stimulus.
A G20 finance ministers meeting in South Korea looked unlikely to reach a conclusion on currencies as dollar volatility rattles commodities markets.
U.S. crude for December rose 63 cents to $81.19 by 2:30 a.m. ET, aided by rising stock markets in Asia, reversing part of Thursday's drop of more than 2 percent. ICE Brent gained 63 cents to $82.46.
Oil was still headed for a second straight week of losses, though marginal, responding to a rising dollar on track for its first week of gains in six weeks. A stronger dollar raises the cost of oil imports for buyers excluding top consumer the United States.
Despite intra-day volatility, oil prices have so far this month remained in a relatively tight range slightly wider than $5, between Tuesday's low of $79.25 after China raised interest rates and a five-month peak of $84.43 on October 7.
\"For the last three or four months, we saw a big decline in the U.S. dollar, and now lots of people see that it will be time for a rebound or to see a correction,\" said Ken Hasegawa, a commodity derivatives manager at Japan's Newedge brokerage.
\"But if the Fed in November shows big stimulus plans, that will send the dollar even lower. Participants have no confidence about price direction. It's still a rangebound market.\"
WEAKNESS MEANS STIMULUS
A batch of U.S. data on Thursday painted a picture of an economy stuck in slow-growth mode, reinforcing views the Federal Reserve will ease monetary policy further next month to try to reinvigorate the recovery.
New claims for jobless benefits dropped last week but remained at levels suggesting little improvement in the distressed labor market. Other reports showed only a modest rise in a gauge of future U.S. economic activity and a small gain in factory activity in the country's Mid-Atlantic region.
Oil's gains on Friday also came on the back of rising equities in Asia, Hasegawa said, supported by the technology sector.
Crude prices this week became increasingly correlated with currency movements, but the link is still stronger for other commodities like gold.
pg \"Gold is much more similar to a currency than crude oil,\" Hasegawa said. \"The market is still driven by fundamentals. Of course there is some movement caused by money factors, but inventories are very high. Therefore, the upside is limited.\"
A record influx of crude oil into China last month far surpassed the needs of the country's refining sector, leaving an apparent surplus of 1.5 million barrels per day, according to Reuters analysis of Chinese data.
The U.S. dollar dipped in Asian dealings on Friday after a volatile session in New York but was seen supported, with investors likely to trim short positions on caution ahead of a G20 finance ministers' meeting in Gyeongju.
(Editing by Clarence Fernandez)