Oil steadied today within sight of a record high near $124 a barrel as the dollar's rise against the euro reduced the appeal of the commodity as a hedge against inflation.
Weighing on the price of crude, the euro fell to a two-month low against the dollar on today as a sharp drop in euro zone retail sales raised concern about the region's economy.
US crude was up 18 cents to $123.71 a barrel by 11.18am, close to the record high of $123.93 reached yesterday.
London Brent was up 33 cents to $122.65.
The dollar slipped to a record low against the euro last month, boosting dollar-denominated commodity prices, but has since recovered against the European currency.
Traders will be looking at the release later today of US government data for initial jobless benefit claims and wholesale inventories for an indication of how the economy is performing.
Oil was supported yesterday by data showing falling fuel supplies in the United States.
The Energy Information Administration reported a decline in distillate inventories - which include diesel and heating oil - that left stockpiles in the world's biggest energy consumer nearly 13 percent below a year ago.
Tight power supplies in China, South Africa, Chile, Argentina and parts of the Middle East have set off a boom in demand for diesel for use in electric generators, adding to robust demand in Europe.