Brent dips on force majeure lift, trade volatile

Brent prices slipped in volatile trading on Tuesday, giving up early gains after news that Royal Dutch Shell lifted a force majeure on its Nigerian Bonny Light production.

US crude remained more than 1% higher, having bounced on technical support and as the dollar gave up early strength.

The dollar index weakened and the euro pared its losses after slipping to a four-month low against the greenback and another record low against the Swiss franc on concerns about the euro zone debt crisis. A weaker dollar is usually supportive to dollar-denominated oil prices.

Brent crude futures for August fell 14 cents to trade at USD 117.10 a barrel by 12:47 p.m. EDT (1647 GMT), having swung between USD 114.95 and USD 117.52.

US crude rose USD 1.35 to USD 96.50 a barrel, having moved back above the front-month 200-day moving average of USD 93.76 after an earlier slip as low as USD 93.55. It also moved back above the 20-day MA of USD 94.71.

"(US crude) had a bounce off the 200-day moving average and the S&P 500 (index) has held above the 1,300 level, helping (U.S.) crude bounce," said Robert Yawger, senior vice president, energy futures at MF Global in New York.

The Dow and the S&P rose slightly as two days of heavy selling provided buying opportunities, but continuing sovereign debt worries kept investors on edge. [.N]

European Union leaders will hold an emergency summit on Friday after finance ministers acknowledged for the first time that some form of Greek default may be needed to cut Athens' debts and stop the crisis from spreading.