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 Aiding Brent's rise was data on Thursday that showed the U.S.
economy grew faster than initially estimated in the third quarter,
suggesting oil demand could improve in the world's top consumer.
The gains, though, were curbed by speculation that positive economic
data would prompt the U.S. Federal Reserve to start unwinding its
bond-buying programme, which could reduce support for riskier assets
such as oil and other commodities.
"GDP numbers were strong, so that makes us more comfortable about a
recovery in the U.S. economy," said Tony Nunan, oil risk manager at
Mitsubishi Corp in Tokyo.
"But once tapering starts, that's probably time for people to take
profits and get out of risk assets, including oil."
Brent crude for January delivery was up 42 cents at $111.40 a barrel
at 0535 GMT, after falling 1.5 percent in the previous two sessions.
Still, the benchmark was on course for a 1.3 percent weekly gain,
its third in four.
U.S. crude was down 2 cent at $97.36 a barrel, after rising 18 cents
on Thursday and touching a five-week high just shy of $98 a barrel.
The contract, buoyed by a drop in U.S. crude stockpiles after a
10-week increase, has gained 5 percent so far this week and is on
track for its best weekly showing in five months.
LET IT SNOW
Oil prices on both sides of the Atlantic could be supported by
severe weather in parts of Europe and the United States.
North Sea oil producers have cut output and moved staff from some
platforms as a major storm blasted towards mainland Europe in what
meteorologists warned could be the worst storm to hit the continent
in years.
Cold weather has also dented some oil and gas production in the
United States and could further crimp output in top crude-producing
states like Texas and North Dakota.
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The U.S. Commerce Department on Thursday revised third-quarter GDP
growth sharply upwards. Weak demand and a pile-up in business
inventories, however, buoyed the case for the Fed to keep buying
bonds for now.
The focus will now be on U.S. nonfarm payrolls for November due at
1330 GMT for further signs of economic growth.
Transcanada Corp told shippers on Thursday that its
700,000-barrels-per-day pipeline from Cushing, Oklahoma, to Port
Arthur, Texas, will be in service by mid-January.
The company said earlier this week it expected the pipeline to be in
service on Jan. 3, buoying U.S. oil prices. Oil traders have been
awaiting details on the pipeline's start date as it will help
relieve a supply glut at the Cushing hub, the delivery point for oil
priced on WTI futures.
The rally in WTI over the past week caused Brent's premium to the
U.S. benchmark to narrow by almost $5 to $13.89 per barrel, after
the spread last week reached its highest since March.
"Brent crude prices edged lower (Wednesday and Thursday) as
investors squared their long positions in Brent crude following the
narrowing of the WTI-Brent spread," analysts at Phillip Futures said
in a note to clients.
[By Jacob Gronholt-Pedersen © 2013 Thomson Reuters. All
rights reserved.]
(Editing by Tom Hogue and Muralikumar Anantharaman) Copyright 2013 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
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