Oil was supported above $132 a barrel Monday in Asia by ongoing worries about global petroleum supplies and the outlook this week for the U.S. dollar, reported CNN.
The dollar has weakened over the past week after a modest recovery, and investors will be watching economic data out of the United States to be released during the next few days for further clues about the health of the world's biggest economy.
"The dollar's been swinging down again," said Mark Pervan, senior commodity strategist at Australia & New Zealand Bank in Melbourne, and that's "going to sway sentiment."
Oil and other hard commodities are seen as hedges against a weakening greenback and inflation. Also, a weak dollar, the currency of international oil trade, makes petroleum products less expensive to Asian and European buyers.
This week, investors will be watching for what implications U.S. consumer confidence, new home sales, gross domestic product and other economic data might have for the dollar and oil prices, he said.
"It's a pretty price sensitive week for economic data," Pervan said. "The data we're seeing out of the U.S. at the moment looks pretty weak. You'd expect that trend to continue, pushing further down on the dollar."
The dollar, one of the factors that has fed oil's rally from about $65 a year ago, was slightly weaker against the yen and the euro in Asian currency trading early afternoon in Tokyo.
Midday in Singapore, light, sweet crude for July delivery was up 46 cents at $132.65 a barrel in electronic trade on the New York Mercantile Exchange. The contract rose $1.38 to settle at $132.19 a barrel on Friday.
Nymex floor trading will be closed Monday for Memorial Day.
Last week, a series of supply warnings rattled composures, and Thursday, a report that the International Energy Agency -- the energy watchdog for the most industrialized nations -- is in the process of lowering its forecast for long-term global oil supply, sent crude futures rocketing to an all-time high of $135.09 a barrel.
Investors are also worried about a growing squeeze on global diesel supplies as demand in China surges has sparked a massive run up in heating oil prices.
Over the weekend, China's top economic planning agency again urged oil and power companies to make sure there are enough supplies for earthquake-hit areas and for the Beijing Olympic Games in August.
"It's an upside down market. Weak economic data out of the U.S. is positive for oil and commodity prices," because of its effect on the dollar, Pervan said.
Normally, poor economic data out of the U.S., the world's largest oil consumer by far, implies that demand and prices will fall.