Oil rises on weaker dollar, but virus woes and U.S.-China tensions weigh

* U.S. dollar slides to 22-month lows against other
currencies
* U.S. coronavirus deaths top 1,000 for a third day in a row
* Investors eye escalating U.S.-China tensions

By Jessica Jaganathan
SINGAPORE, July 24 (Reuters) - Oil edged up on Friday as the
dollar fell to an almost two-year low, although demand concerns
stemming from rising coronavirus cases and U.S.-China tensions
kept a lid on prices.
The dollar slid to 22-month lows against a basket of
currencies .DXY . A weaker dollar usually spurs buying of
commodities priced in the greenback, like oil, because they
become cheaper for holders of other currencies. USD/
Brent crude LCOc1 rose 15 cents, or 0.4%, to $43.46 a
barrel by 0137 GMT, and U.S. West Texas Intermediate (WTI) crude
CLc1 rose by 12 cents, or 0.3%, to $41.19.
"Crude prices are attempting to stabilize as expectations
still remain high that Congress will be successful in delivering
another pandemic relief package" for the United States, said
Edward Moya, senior market analyst at OANDA in New York.
"Yesterday's U.S. economic data showed that the economic
recovery is struggling and pretty much guarantees more federal
aid is coming."
The number of Americans filing for unemployment benefits
unexpectedly rose to 1.416 million last week for the first time
in nearly four months, suggesting U.S. economic recovery is
stalling amid a resurgence in COVID-19 cases. The United States on Thursday recorded over 1,000 deaths
from COVID-19, marking the third straight day the nation passed
that grim milestone as the pandemic escalates in its southern
and western states. Globally, more than 15 million have been
infected and over 620,000 have died. While the rise in infections has fanned fears of renewed
government lockdowns, worries that oil demand could be hit have
been exacerbated by tensions between the United States and China
- the world's top two oil consumers.
China said the U.S. move to close its Houston consulate this
week had "severely harmed" relations and warned it "must"
retaliate, without detailing what it would do. Washington on Tuesday gave China 72 hours to close the
consulate, which it said was "to protect American intellectual
property and Americans' private information", in a dramatic
escalation of tension between the world's two biggest economies.
Barclays Commodities Research has said oil prices could see
a correction in the near term if a recovery in fuel demand slows
further, especially in the United States.
The bank lowered its oil market surplus forecast for 2020 to
an average 2.5 million barrels-per-day (bpd), from 3.5 million
bpd previously.