After languishing most of the week, crude oil prices galloped to the finish line on Friday, tacking on 1.7% and recouping most of last week's losses as positive new-housing sale data spurred most markets forward.
The decision by the Greek government on Friday to activate a bailout plan from the European Union and the International Monetary Fund eased pressure on the euro, contributing to oil price gains as the dollar slipped against the joint European currency.
The benchmark West Texas Intermediate contract gained $1.42 Friday to end the week at $85.12 a barrel, compared with the benchmark's finish of $83.24 in the previous week.
An unexpectedly strong gain of 27% in U.S. new housing sales in March the strongest monthly gain in nearly five years galvanized a market looking for any sign of a pickup in U.S. demand for oil. Stock markets also advanced on the news, led by energy stocks.
The week started with oil prices taking a hit in the wake of Iceland's volcano grounding most northern European flights and then bounced back on Tuesday as authorities began to ease flight restrictions. Some analysts also cited lingering concern about U.S. fraud charges against Goldman Sachs for Monday's decline, after the announcement of the civil suit last Friday pushed most markets down.
The weekly U.S. inventory report on Wednesday was bearish for oil prices, showing high stockpiles of crude in the Midwest, where influx of new Canadian oil and a temporary slump in demand due to refinery maintenance led to a build-up in stocks.
For much of the week, the exchange rate between the euro and the dollar tended to drive oil prices amid mixed economic data. The euro trended lower through Thursday with the uncertainty about Greece maintaining pressure on it. The formal announcement on Friday that Greece would in fact seek the funds removed some of that uncertainty.
The IMF said in its World Economic Outlook that relatively strong economic growth would keep upward pressure on most commodities prices. However, the multilateral lending agency cautioned that in the case of oil, OPEC could increase its production if it wanted to keep oil prices in the $70 to $80 trading range.
By. Darrell Delamaide