Brent slips, stays below $104 on demand woes, firm $

Brent futures slipped on Friday, staying below USD 104 as bleak US economic data revived worries about demand growth in the world's biggest oil consumer, while a stronger dollar also pressured prices.

Barring news on major supply disruption, the dollar will be a key driver for oil with investors increasingly expecting the greenback's recent surge to peter out.

Brent slipped 5 cents to USD 103.73 a barrel by 0552 GMT. It is expected to end the week mostly unchanged. U.S. oil was up 18 cents at USD 95.34, after settling up 86 cents, but was on track to end a three-week winning run.

"The dollar will influence oil quite a bit over the next few sessions because at some point it will start to weaken as it has strengthened too much in recent days," said Tetsu Emori, a commodities sales manager at Astmax Investments in Tokyo.

"All US economic indications in the last few days have been weak and that is raising doubts about demand."

The US economy showed fresh signs of slowing in the second quarter, with factory activity slipping in the mid-Atlantic region while groundbreaking declined at home construction sites.

POLICY DOVE

The strong dollar and a weak outlook for demand will keep Brent trading in a USD 103 to USD 105 range next week, while the U.S. contract will swing between USD 95 and USD 98, Emori said.

The dollar held firm near a 10-month high against a basket of major currencies on Friday after a regional Fed chief, long seen as a policy dove, said the Fed could begin easing up on stimulus this summer and end it late this year.

A firm dollar pressures oil as its strength makes commodities more expensive for holders of other currencies.

Brent has risen about USD 7 from the low of under USD 97 for the year touched on April 18. The U.S. contract has gained nearly USD 10 since the 2013 low of USD 85.61 was touched on the same day.

The difference between the U.S. benchmark and Brent widened beyond USD 10 per barrel for the first time since May 7 in the previous session, and was at about USD 8 on Friday. It hit a 2013 low of USD 7.20 earlier this week.

However, uncertainty over political tensions in the Middle East cushioned oil prices, with Russia's foreign minister saying Iran must take part in a proposed international conference to try to end Syria's civil war.

Charts show that Brent is expected to drop to USD 102.42 as it failed to break a resistance at USD 104.13, while U.S. oil is expected to revisit its Thursday low of USD 93.23, said Reuters technical analyst Wang Tao.