* Libya sees "good intentions" in oil port talks
* Investors doubts exports will return quickly
* Coming up: U.S. non-farm payrolls March; 1230 GMT
(Updates detail, comment, prices; paragraphs 5-6, 9-11)
LONDON, April 4 (Reuters) - Brent crude oil rose towards $107 a barrel on Friday as investors cast doubt on the possibility that Libya's major oil ports were about to reopen, boosting dramatically supply of high quality fuel to world markets.
Expectations have 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 on Thursday it had seen evidence of "good intentions" at indirect talks with eastern rebels which could lead to renewed exports.
But previous reports of ports reopening have proven false and investors suspect 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 was up 40 cents at $106.55 a barrel by 1000 GMT. U.S. crude for May gained 71 cents to $101.0 a barrel. Front-month U.S. crude was set to post its first weekly loss in three weeks.
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.
ANZ analysts said in a note that investors were likely to remain cautious in light of a breakdown of agreements between the Libyan government and rebels earlier this year.
"The previous expectation of Libyan oil supply returning quickly and comprehensively to the market has clearly given way to a more realistic appraisal of the situation," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.
"It first remains to be seen whether the oil terminals in the east of Libya do in fact open in the next few days."
"Even if this does happen, however, it is by no means clear whether the previous export volume of 600,000 bpd can be quickly regained," he added. "It takes time for production to be ramped up and for pipelines to be filled."
Relative stability in oil also reflected caution among investors ahead of U.S. non-farm payrolls data later on Friday.
Economists polled by Reuters forecast a 200,000 increase in U.S. jobs in March, the largest gain in four months, which would bode well for the demand outlook in the world's top oil consumer.
That would also help counter some recent downbeat data.
The U.S. trade deficit unexpectedly widened in February as exports hit a five-month low, suggesting first-quarter growth could be much weaker than initially anticipated.
(Additional reporting by Florence Tan and Manolo Serapio Jr in Singapore; editing by William Hardy)