U.S. crude oil rose on Friday, lifted by a positive consumer confidence report that indicated strength in the U.S. economy, while Brent was pulled higher by traders covering short positions before the weekend in case ties with Russia worsened.
The International Energy Agency had set a bearish tone for the market earlier in the session after it lowered its global demand forecast for 2014 due to expectations that more Libyan crude will reach the market next week, pushing Brent lower. But by mid-morning trade both the American and European benchmarks rose and were on track to end the week higher.
U.S. oil settled up 34 cents at $103.74 a barrel, ending the week nearly 3 percent higher. rose 20 cents near $108 a barrel after settling 52 cents lower on Thursday. The contract was on track to end the week nearly 1 percent higher, recouping part of the previous week's losses.
U.S. oil's rally was underpinned by strength in U.S. gasoline prices, which began climbing earlier in the week due to a sharp, unexpected fall in gasoline inventories that indicated robust demand ahead of the start of the summer driving season. News that U.S. consumer sentiment rose in April to its highest in nine months caused prices to bounce and move higher, building on technical strength, analysts said.
Brent was supported by the simmering tensions between the West and Russia that threatened to interrupt gas supplies to Europe. Russia warned Thursday it would cut off gas supplies to Ukraine if Kiev did not pay its bill but on Friday emphasized that this would not affect supplies to Europe.
Brent's premium over U.S. crude oil has narrowed over the week to its tightest since mid-September, adding buying support for U.S. crude.
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