Oil Ends Week With Small Gains

Heading into the three-day Memorial Day weekend, oil ended the week on a modestly higher note as NYMEX-traded crude for July delivery rose 20 cents to $90.86 per barrel. In London, Brent crude added 28 cents to settle at $106.83 per barrel. The dollar was slightly stronger as well as the PowerShares DB US Dollar Index Bullish (NYSE: UUP) flirted with a new 52-week high on below average volume. With just four trading days left in May here in the U.S., it seems all but certain that oil will finish the month with a loss and probably a double-digit one at that. Prior to the start of trading Friday, U.S. crude futures had slumped about 15% since the start of the month.

The good news is falling oil prices have provided some relief at the pump for consumers and drivers and that relief is well-timed as the Memorial Day weekend marks the start of the summer driving season. On that note, the United States Gasoline Fund (NYSE: UGA) was slightly higher on the day, but the fund has lost almost 8% in the past month and fell below its 200-day moving average several days ago.

Slow, pre-holiday trade prevented oil traders from really bidding up crude on the back of the day's lone economic data point, which turned out to be a good one. In economic news, the Thomson Reuters/University of Michigan's final reading on May consumer sentiment jumped to 79.3 from 76.4 in April. Economists expected a May reading of 77.8.

Going forward, the health of the U.S. consumer will prove pivotal to oil's fortunes. The consumer accounts for two-thirds of GDP in the U.S., the world's largest oil consumer. On that note, it's important to remember that although next week will be a short week, the Labor Department delivers the May jobs report next Friday. Economists are expecting the addition of 150,000 new jobs.

U.S. equities traded lower for most of the session and with most traders leaving their desks early to get a jump on the long weekend, buyers weren't around to launch stocks to another late-day rally. As a result, oil equities mostly closed lower as Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) lost 0.7% and 1.2% respectively.

International oil stocks saw a little bit of upside as buyers looked to be going in search of yield with the likes of BP (NYSE: BP) and Total (NYSE: TOT). Europe's second-largest and third-largest oil companies offer better dividend yields than their U.S. counterparts (BP is over 5% and Total is approaching 6%) and both have been taken the woodshed lately, indicating some buyers where nibbling at value in those names today.