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NEW YORK Brent crude prices inched up a penny on Friday, fading late as a tumble in consumer sentiment offset the lift provided by rising equities markets and data showing higher U.S. retail sales in July.
U.S. crude fell back and ended the day lower and both Brent and U.S. contracts posted their third straight weekly losses.
U.S. consumer sentiment fell sharply in early August, to the lowest index level since 1980, even though retail sales posted their biggest gains in three months in July, separate reports showed.
The consumer gloom caused U.S. and European equities markets to briefly pare gains after receiving a lift from the promising retail sales data. Both equities markets finished the day higher. .N .EU
Equities received a lift earlier when a ban on short-selling financial stocks in four European countries including France took effect on Friday.
"The consumer sentiment just took the wind out of crude's sails," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
"(U.S.) crude is trying to get back into the $85-$115 range it had been in most of the year."
ICE Brent crude for September edged up 1 cent to settle at $108.03 a barrel, after swinging from a $106.86 low to the week's high of $109.16.
Brent's lost 1.23 percent for the week, but recovered from its $98.74 low for the week.
U.S. September crude fell 34 cents to settle at $85.38 a barrel, after gyrating from $84.02 to $87.37.
The loss on the week was 1.73 percent, but U.S. crude recovered from the week's $75.71 low, weakest since the intraday low of $75.60 on September 29.
U.S. crude's Relative Strength Index, at 37.40, remained above the 30 threshold that signifies oversold conditions, having dipped below that level earlier in the week.
Brent's premium to U.S. crude stood at $22.39 a barrel, below the record $26.08 posted intraday on Tuesday.
Tepid trading volumes may have reflected uncertainty, with Brent and U.S. volumes only approaching 600,000 lots in post-settlement trading. U.S. volumes were lowest since late July when the debt-limit fight in Congress was stalling trading, after topping 1 million lots on Thursday.
Total open interest continued to rise during the week, despite the week's price plunges and volatility.
"Open interest rising could be new shorts or new longs. But it's true that rising open interest in a down market is more likely new shorts entering the market," said Tom Bentz, director, BNP Paribas Commodities Futures Inc in New York.
Money managers cut their net-long U.S. crude futures and options positions to the lowest in over eight months in the week to Tuesday, the Commodity Futures Trading Commision said in a report released after oil futures settled.
Other broker and hedge fund sources noted that with the recent large price swings some investors may have hung on to their positions instead of exiting prematurely.
U.S. gasoline slipped and heating oil futures rose slightly. with gasoline's early boost tempered as Irving Oil Ltd said its New Brunswick, Canada refinery operations had returned to normal after a "minor upset" on Thursday.
Also supportive to oil along with equities and better retail sales was the possibility that storms could form from low pressure systems being eyed by weather forecasters and energy investors.
The U.S. National Hurricane Center tracked four low-pressure systems in the Atlantic and said one had a 60 percent chance of forming a tropical cyclone in the next 48 hours.
WEEK OF TURMOIL
Oil futures and equities markets were buffeted this week, starting when trading resumed after the downgrade of the U.S. credit rating by Standard & Poor's late last Friday.
Volatility continued after the U.S. Federal Reserve on Tuesday noted weaker economic growth and promised to keep benchmark interest rates near zero through mid-2013.
Then weekly oil inventory reports lifted oil, showing surprise and sharp drops in U.S. crude stockpiles and slips in refined product stocks. <API/S> <EIA/S>
(Additional reporting by Gene Ramos in New York, Claire Milhench in London and Manash Goswami in Singapore; Editing by Marguerita Choy, Dale Hudson and David Gregorio)