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 Brent gains were capped as traders sold contracts to unwind the
spread between the European benchmark and its American counterpart.
Brent's rise was also checked after South Sudan government forces
said they had defeated rebels in the capital of the country's major
oil producing state, after four days of intense fighting. By Friday
afternoon, the government said it was ready for a ceasefire.
Escalating violence in South Sudan had threatened to reduce its
crude output further, adding to supply outages in Libya, where
production is running at a mere 250,000 barrels per day (bpd).
Prices were supported by U.S. government data that showed crude oil
stocks in the U.S. fell 4.7 million barrels in the week ended Dec.
20, double the forecast of a 2.3-million-barrel draw.
Brent oil ended the day 20 cents higher at $112.18 per barrel, the
highest settlement since Dec. 3. U.S. crude added 77 cents to settle
at $100.32, the highest settlement price since Oct. 18. U.S. oil
futures broke above the $100-mark for the first time since Oct. 21.
The spread between the two benchmarks <CL-LCO1=R> narrowed 57 cents
to $11.86 per barrel from the previous session.
"The selling pressure in the spread showed up as WTI rallied," said
Gene McGillian, analyst with Tradition Energy in Stamford,
Connecticut.
U.S. gasoline futures prices were tempered by the news that workers
at Total's last striking refinery in France ended their two-week
walkout, easing concern over product market tightness. The contract
ended less than one percent lower at $2.8161 per gallon.
U.S. refineries ran at high capacity to meet demand for refined oil
products, which rose 5.3 percent from a year ago, indicating
increased demand for U.S. oil. Distillate stocks, which include
heating oil and diesel, fell close to four times the market forecast
as the U.S. continues to export refined fuels to Europe and Latin
America.
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Ultra low-sulfur diesel (ULSD) futures settled 0.95 percent higher
at $3.1241 per gallon, the highest settlement price since Sept. 6.
"There's strong demand here from the refining sector and the annual
destocking is giving the market some support," said John Kilduff, a
partner at Again Capital LLC.
"The demand numbers were supportive yet again from the products
side."
Oil output in South Sudan had fallen by nearly a fifth to 200,000
bpd after the Unity state oilfields shut earlier this week due to
fighting.
In Libya, a mix of militias, tribesmen and political minorities,
demanding a greater share of the country's oil wealth and more
political power, have shut most oilfields and ports, cutting oil
output to 250,000 bpd from 1.4 million bpd in July.
The U.S. Commodity Futures Trading Commission will release its
weekly commitments of traders report at 3:30 p.m. EST (2030 GMT) on
Monday, one day late due to the Christmas holiday on Wednesday.
(Additional reporting by Anna Sussman
in New York and Peg Mackey in London; editing by Andrew Hay and Marguerita Choy)
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