Oil falls towards USD 49 per barrel

But the gains in the dollar make oil more expensive in other currencies,while investors are still nervous about the financial sector ahead of the results of stress tests for US banks due on May 4.

The US government will later on Friday give the assumptions it will use for the stress tests.

US crude fell 31 cents to 49.31 a barrel at 0339 GMT,while London Brent crude fell 41 cents to 49.70.

8220;At some point people must look at fundamentals8230; and understand that oil prices should be going down,8221; Tetsu Emori,a fund manager at Tokyo-based Astmax Co Ltd,said.

8220;The current weakness is pointing out a weaker trend in the future. The US inventory data hasn8217;t been priced into the market yet,8221; he said.

Falling demand in the world8217;s top consumer has been behind crude8217;s 100 fall from its record high in July last year. Government data on Wednesday showed US crude inventories had swelled to a fresh 19-year high last week.

Adding pressure on crude prices,the dollar firmed against the euro on Friday,as traders took profits on gains made a day earlier.

There was more weak economic US economic data on Thursday. Existing home sales fell to a lower-than-expected rate in March,and the number of people claiming jobless benefits jumped to another record in early April.

Economic indicators due out later on Friday include US durable goods orders for March,US new home sales for March and the United Kingdom8217;s first quarter preliminary GDP figures.