Oil bounces above $103

By Annika Breidthardt

SINGAPORE (Reuters) - Oil prices bounded above $103 a barrel on Thursday after falling to another five-month low the previous day, drawing support from Hurricane Ike and OPEC's surprise output cut while wary traders watched the U.S. dollar.

The dollar briefly touched a new one-year high against the euro on Thursday but weakened versus the yen, lending a touch of support to a commodities complex that has been battered by the unwinding of the short-dollar/long-commodities trade.

U.S. light crude for October delivery firmed 72 cents to $103.30 a barrel by 0547 GMT (6:47 a.m. BST), after rallying more than $1 earlier in the session.

That came after it dropped as low as $101.36 a day earlier after the pressure of a rising dollar and concerns about global demand outweighed earlier bullish news that OPEC had agreed to cut output by about 500,000 bpd.

London Brent crude rose 48 cents to $99.45 a barrel.

"While OPEC has certainly drawn a line in the sand around the $100 level, it remains to be seen if the cartel can actually achieve the cuts outlined in the announcement," said Jonathan Kornafel, Asia director at U.S.-based options trader Hudson Capital Energy.

Oil prices have tumbled 30 percent since hitting a record high above $147 a barrel three months ago, a descent barely slowed by a pair of hurricanes whipping through the U.S. Gulf, home to a quarter of U.S. oil production.

Oil companies kept shut almost all U.S. offshore production for a second week and began shutting coastal refineries in Texas as Hurricane Ike headed toward the key U.S. energy hub.