Both benchmarks retreated from the day's highs along with the U.S.
equities market, which fell sharply from the intraday record highs
hit after the March U.S. nonfarm payrolls report was released. The
report showed 192,000 jobs were added in March.
The jobs figure was seen as confirmation that the weakness in the
U.S. economy in January and February was the result of severe winter
Expectations had been building that an eight-month blockage of
Libya's oil export ports would end after rebels and the government
said they were close to an agreement.
The Libyan government said it had seen evidence of "good intentions"
at indirect talks with eastern rebels that could lead to renewed
Previous reports of the reopening of ports have proven false and
investors suspected there will again be no breakthrough.
"In the oil market it is Libya that is pulling the strings," said
David Hufton, managing director of London brokerage PVM Oil
Associates. "High hopes of an imminent settlement with rebels in the
east of the country have been punctured."
May Brent crude rose 57 cents to settle at $106.72 a barrel, down
1.3 percent for the week. U.S. crude for May gained 85 cents to
settle at $101.14 a barrel, after earlier notching a high of
$101.63. Front-month U.S. crude fell 0.6 cents on the week, its
first weekly loss in three weeks.
The spread between Brent and U.S. crude, also known as West Texas
Intermediate, or WTI, had narrowed to as low as $4.81 by midweek as
Brent lost more than $3 on hopes that Libyan oil would soon be back
online. It widened to nearly $6 on Thursday before narrowing again
on Friday to settle at $5.58.
"The spread's in today by about 50 cents, which suggests that
concerns about Libyan oil making its way back onto the world market
place has kind of run its course, and the focus is back on Cushing
oil flowing down to the Gulf Coast," said Gene McGillian, an analyst
at Tradition Energy in Stamford, Connecticut.
The restart of Libya's eastern oil ports could release about 600,000
barrels per day (bpd) of crude, bumping up the OPEC producer's
output from around 150,000 bpd, but still far from the 1.4 million
bpd it produced last July.
[to top of second column]
Investors remained cautious after a breakdown in agreements between
the Libyan government and rebels earlier this year.
Geopolitical risk buoyed oil markets ahead of the weekend, despite a
falling U.S. equities market, analysts said, citing the ongoing
tensions in Libya and the Russia/Ukraine crisis.
Britain urged its European Union partners on Friday to press ahead
with preparing tough economic sanctions against Russia, saying large
numbers of Russian forces remained on Ukraine's eastern border and
there had been only a "token" withdrawal.
"It's hard to get too bearish going into the weekend with so many
unknowns: Russia, Ukraine, Libya," said Phil Flynn, an analyst with
the Price Futures Group in Chicago.
"People don't want to be short in case something hits the fan over
the weekend, which it very well could, given all the sabre-rattling
that's going on."
Money managers raised their net long U.S. crude futures and options
positions by 15,620 to 356,590 in the week to April 1, the U.S. Commodity
Futures Trading Commission (CFTC) said on Friday.
(Additional reporting by Christopher Johnson in London, Florence Tan
and Manolo Serapio Jr in Singapore; editing by William Hardy, David
Evans, Steve Orlofsky, Diane Craft and Peter Galloway)
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