Brent crude oil was little less than 110 dollars a barrel on Friday remaining on course for its highest weekly close this year.
Supply disruptions in Africa has tightened the market.
U.S. benchmark West Texas Intermediate was heading for its sixth straight weekly rise and its discount to Brent has shrunk to the narrowest in four months.
Meanwhile, a new pipeline helps drain supplies from WTI’s delivery point at Cushing, Oklahoma.
Prices faced some pressure on signs Iran substantially increased crude oil exports to China and India in January.
Total exports from the Islamic Republic remain constrained by Western sanctions.
Brent crude for April delivery was 16 cents lower at 110.14 dollars a barrel, having hit a seven-week high of 110.82 dollars on Wednesday.
U.S. crude futures for April delivery dropped 12 cents to 102.63 dollars.
Brent’s premium to U.S. crude narrowed to as little as 7.09 dollars in the previous session, its tightest since Oct. 9, and was around 7.50 dollars a barrel on Friday.
“There is more upside for WTI than Brent because of the ongoing bullish news,” said Tan Chee Tat, analyst at Phillips Futures in Singapore, pointing to extreme.
Data from the U.S. Energy Information Administration on Thursday was mixed for oil as Cushing crude stocks fell 1.73 million barrels in the week to Feb. 14.
Meanwhile, the country’s overall crude inventories rose almost one million barrels.
Crude stockpiles in Cushing have fallen below the five-year average.
The recent rate of stock declines was unlikely to be sustained due to a rise in domestic production, BNP Paribas analysts said in a note.
Seasonal refinery maintenance in March and April will also reduce demand, they said.
A weaker U.S. dollar fell to a seven-week low against the euro earlier this week, as demand for dollar-denominated commodities become more affordable to holders of other currencies.
Domestic conflicts in Libya and South Sudan, and escalating protests in Venezuela have added support to Brent prices.
South Sudan’s oil production has fallen by about a third to around 170,000 barrels per day (bpd).
The capital of the main oil-producing region in the cuntry has been divided by the army and rebel fighters.
Maintenance at Angola’s Plutonio oilfield in March will also cut supply by about 180,000 bpd.
“Renewed risks would definitely support Brent comfortably at 105-110 dollars a barrel,” Tan of Phillips Futures said.
Traders also eyed the turmoil in Ukraine, where violence escalated sharply on Thursday between pro-European protesters and forces loyal to Russian-backed President Victor Yanukovich.
Ukrainian protesters exchanged fire with police on Friday between Kiev’s Independence Square and the parliament building, a police statement said.
The violence has strained ties between Moscow and members of the European Union, one of the main markets for Russia’s huge oil and gas supplies. (Reuters/Naija247news)
