OIL prices moved up closer to US$90 a barrel Friday as a weaker dollar helped counter concerns that China, the world’s biggest energy consumer, will take more aggressive steps to slow its torrid economic growth.

By early afternoon in Europe, benchmark crude for March delivery was up 38 cents at US$89.97 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost US$2.22 to settle at US$89.59 on Thursday.

Oil and other commodities have taken a hit from news that China’s economy defied expectations to speed up in the fourth quarter while inflation remained elevated.

Traders speculated that means China’s government will take further measures to control cost of living increases. China has had a robust appetite for commodities from oil to soybeans as its economy has boomed in the past year.

Investors worry that “China may now be more eager to rein in inflation rather than to promote growth,” energy consultants Cameron Hanover said in a report.

But it could be good news for drivers if the fall in the oil price is sustained and translates into lower prices at the gasoline pump.

A weaker dollar helped lift prices by making crude cheaper for investors holding other currencies.

The euro was up to US$1.3539 on Friday from US$1.3469 Thursday night, while the British pound is rose to US$1.5955 while the dollar is down to 82.81 Japanese yen from 83.04 yen the night before in New York.

Oil prices were restrained by the Energy Department’s weekly report that showed growing US stockpiles of oil, gasoline and distillates, which include heating oil and diesel fuel. All are higher than the five-year average, an indication that energy demand remains tepid.

The Energy Information Administration said natural gas supplies fell more than expected last week, as very cold weather covered much the country. But supplies are still about two per cent above the five-year average.

“We expect inventory builds to continue in the weeks to come, which could add further pressure to oil prices,” said a commodities report from Tom Pawlicki at MF Global in Chicago.

In other Nymex trading in February contracts, heating oil was up 1.82 cent at US$2.6414 a gallon and gasoline rose 1.22 cents to US$2.4347 a gallon. Natural gas added 5.5 cents to US$4.75 per 1,000 cubic feet.

In London, Brent crude was up 61 cents at US$97.19 a barrel on the ICE futures exchange.