London (Platts)--16Mar2010/811 am EDT/1211 GMT

Crude oil futures perked up into the European morning as dollar weakness followed some earlier strength.

At 1141 GMT, the April WTI contract traded 34 cents higher at $80.14/barrel, while the April Brent contract on ICE was up 44 cents at $78.33/b. The two contracts had spent much of the morning in a range before breaking to the upside.

"I think the answer is dollar weakness," a trading source said. "Gasoil has also kept steady."

Following the downward price trend experienced since Friday the source said, "The market may have been a little overdone on the sell side."

At 1141 GMT, the euro was trading at $1.3728 compared with the previous day's close of $1.3680 and the earlier low of $1.3656. Sterling was trading at $1.5139 compared with the previous day's close of $1.5061 and the earlier low of $1.4975.

The market awaits the outcome of the Federal Reserve meeting due out later today. Although the target rate is expected to remain unchanged attention will be focused on the outlook for the future as well as any possible monetary moves.

"Today we will have to focus again on the mix of fundamentals and the dollar with first the outcome of the Fed meeting (usually 15 minutes before the NYMEX close) and later the release of the API data," Olivier Jakob of Petromatrix said in a report.

Equities were also supportive of prices with the London FTSE 100 up 27.24 points (0.49%) and the Frankfurt XETRA DAX was 44.93 points (0.76%) higher.

The Brent April contract expires Tuesday and the spread to May widened considerably through the morning. Having closed at minus $0.74/b yesterday, the spread had traded as low as minus $1.13/b through the morning although it was seen to bounce back.

"The Brent April contract expires today and the expiring spread is falling off a cliff," Olivier Jakob said in his report. "Some of the cash differentials (Urals) have been weak but we have to wonder if the collapse of the front Brent spread is not also due to some of the strong investment flows that have moved to Brent recently and are learning the specifics of the Brent contract the hard way."

--Elzbieta Rabalska, elzbieta_rabalska@platts.com