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 Benchmark Brent crude was at $65.83 per barrel at 1145 GMT (7.45
a.m. EDT), up 29 cents after hitting a session high of $66.01, on
track for a 1 percent weekly decline. U.S. crude was 48 cents higher
at $59.42 a barrel, little changed on the week.
Brent was still around $4 below the 2015 peak reached earlier in the
week, hit by a resurgent dollar and signals that some U.S. producers
would ramp up drilling if prices continued to rise.
Analysts said Brent seemed capped around $70, and may already be
overvalued as oversupply continued and U.S. producers, which have
sharply reduced drilling in recent months of low prices, could
increase production.
"The small drop in U.S. production in recent weeks certainly does
not justify the 30-40 percent price increase" since January, said
Hans van Cleef, senior energy economist with ABN AMRO.
"The oil market is still very much supply-driven, and in the end, we
face a huge oversupply."
But U.S. shale producers indicated that the recent gains in oil
prices could lead to new drilling. Harrold Hamm, chief executive
officer of Continental Resources, said on Thursday that $70 a barrel
is a price "that turns it on for us".
Later on Friday, oil services company Baker Hughes will publish its
weekly U.S. oil rig count, a key data point for the industry's
activity which has declined for 21 straight weeks.
"If the oil rig count were to stop falling, this would presumably
put considerable pressure on oil prices, though this is not likely
to happen this week," Commerzbank analysts said in a note.
Prices also received a boost later in the day as other financial
markets rose on the back of an unexpectedly decisive election
victory for Britain's ruling Conservative Party.
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Markets are also watching for U.S. nonfarm payrolls data due later
in the day, as another weak reading could deepen worries that the
U.S. economy may not be gathering momentum.
China imported 30.29 million tonnes of crude oil in April (222
million barrels), up 13.0 percent from 26.81 million tonnes in the
previous month, although its exports, denominated in yuan, fell 6.2
percent in April from a year earlier.
Analysts cautioned that the figure could be a sign of a stock build
in the world's second-largest oil consumer, where strategic
petroleum reserves are reportedly close to capacity.
(Additional reporting by Henning Gloysten in Singapore; Editing by
Dale Hudson/Ruth Pitchford)
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