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NYMEX-US crude holds above $97, set for biggest weekly fall since June

Thursday, 24 Oct 2013 | 8:47 PM ET

SINGAPORE, Oct 25 (Reuters) - U.S. oil futures steadied above $97 a barrel on Friday after falling to four-month lows in the previous session amid rising supply that pushed its discount to Brent crude this week to the widest since April.

U.S. crude is headed for its biggest weekly drop in four months.

FUNDAMENTALS

* U.S. crude for December delivery was up 6 cents at $97.17 a barrel by 0030 GMT, having touched $95.95 on Thursday, its lowest since June 27. For the week, the contract has lost 3.6 percent so far, its biggest decline since the week ended June 21.

* Brent oil gained 8 cents to $107.07 per barrel. It has dropped 2.6 percent this week, its steepest in a month.

* Brent's premium over West Texas Intermediate crude <CL-LCO1=R> narrowed to less than $10 on Friday, after crossing more than $13 on Wednesday.

* U.S. crude oil inventories rose by 5.2 million barrels last week, the fifth-largest increase this year, with stocks at the Cushing hub rising for the second week in a row, government data showed this week. But traders said the spike in the Brent-WTI spread this week may have been overdone, given the likely pick-up in demand as refiners return from maintenance.

* Investors are also keeping an eye on China's money market where benchmark rates have risen sharply amid signs that Beijing will tighten its monetary policy. Tighter policy in China could curb crude demand in the world's second-largest oil consumer.

* China's factory activity hit a seven-month high in October, but U.S. manufacturing output fell for the first time in four years while the euro zone economy lost momentum, suggesting the world economy is still facing speed bumps.

* Citgo Petroleum Corp shut down its refinery near Chicago after a fire at its main crude unit and did not know when operations might resume, lifting gasoline futures.

MARKETS NEWS

* Asian shares edged up and the dollar was holding near a two-year low against the euro on expectations the Federal Reserve would maintain its massive monetary stimulus into 2014.

DATA/EVENTS (GMT)

0800 Germany Ifo business climate

0800 Euro zone M3 money supply

1230 U.S. Durable goods orders

1400 U.S. Wholesale inventories

(Reporting by Manolo Serapio Jr.; Editing by Richard Pullin)