Oil surges on weak dollar, Iran tension

Crude prices surged on Friday as the dollar weakened on unexpected weak economic data and market attention returned to continuing tension between Iran and the West. U.S. economic data on Friday came in surprisingly soft. The industrial output for February edged up 0.02 percent due to declines in mining and utilities, below expectation of a 0.4- percent increase. The Reuters/University of Michigan\'s consumer sentiment index fell to 74.3 in March from 75.3 in the previous month, and the main cause was the high gasoline prices. Besides, the CPI rose 0.4 percent in February, indicating rising inflation pressure. All the soft data pushed down the dollar, which recently hit an 11-month high against the yen. The dollar index retreated 0.5 percent. A weakening dollar made the crude more attractive. Meanwhile, Iran tension came back to the market after the Society for Worldwide Interbank Financial Telecommunication cut its ties with Irannian banks on Thursday. Investors worried that the isolation would made Iran\'s oil sales more difficult. Risks of supplies disruption were bullish to crude prices. But the trading volume was low on Friday, with Brent\'s volume 34 percent below its 30-day average and U.S. crude 27 percent below its 30-day average. Light, sweet crude for April delivery gained 1.95 dollars, or 1. 86 percent to settle at 107.06 dollars a barrel on the New York Mercantile Exchange. For this week, it was down 34 cents, or 0.32 percent. In London, Brent crude for May delivery soared 3.21 dollars, or 2.62 percent to close at 125.81 dollars a barrel. For this week, it slipped 17 cents.