US retail sales dropped by the largest amount in eight months according to the May numbers released Friday (June 11) morning. This puts a bit of a brief damper on more upbeat economic news of late that has help keep oil prices propped up in the mid-$70s.

US jobless claims numbers helped encourage investors this week that the largest remaining hurdle to economic recovery may be seeing improvement.

Another catalyst for the recent firming in oil prices has been data showing that trade in China is expanding tremendously, helping to offset the struggles in Europe and other parts of the world. In early Friday morning trade of benchmark crude for July delivery, the price of a barrel of oil was lower by 50 cents to $74.97. This was after a gain of $1.10 on Thursday, which produced a settle price of $75.48 per barrel.

Coinciding with the improving oil prices has been a firming up of the Euro, which has crept up to the $1.21 level, after falling below $1.19 earlier this week. It appears speculators may be confident that the European Union members are going to be able to help support Greece, Spain, Portugal and other struggling member countries.

Fundamentally, it appears that global oil demand may help drive prices higher in the near future. The International Energy Agency shared Thursday that it had raised forecasts for global demand by 60,000 barrels per day. Their overall forecasted demand over 86.4 million barrels each day marks a two per cent increase over the same time period from 2009.

Some analysts have pointed to the $75-76 dollar range as a key technical indicator as to the near-term direction. A significant break of this level could result in a move back to the near-term high of $87 per barrel. However, a failure at this level could also produce another dip below $70 in the short-term.

Like every other major speculative market, investors are watching closely to see what is going on with the US recovery, the European credit situation, and budding economies in China and other parts of Asia. And, of course, the continued spilling of BP oil in the Gulf of Mexico may eventually play a role with regard to supply.