Oil prices were nearly unchanged by midday Friday as a stronger dollar balanced concerns that Tropical Storm Gustav will impact U.S. offshore oil and gas production.
Earlier, crude prices had flirted with $119 a barrel on concerns that Gustav, which was poised to enter the Gulf of Mexico over the weekend as a hurricane, would damage offshore oil facilities in the gulf.
"The dollar is up and so we're seeing prices of crude move down from the highs. Remember that, in 2005, the market sold off hard before [Hurricane] Katrina's arrival and then rallied again when it hit,'' Tom Knight, a trader at Truman Arnold in Texarkana, Texas, said.
U.S. light, sweet crude fell 13 cents, or 0.11 percent, to settle at $115.46 a barrel, erasing losses from Thursday that resulted from the EIA's pledge to release emergency stockpiles if Gustav disrupted U.S. oil output.
London Brent crude was also lower.
Tropical Storm Gustav was forecast to strengthen into a hurricane by Friday or Saturday as it neared the Gulf of Mexico.