Brent holds above 106 US Dollars, but set for worst week in 3 months - CNBC Africa

Brent holds above 106 US Dollars, but set for worst week in 3 months


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Oil rig. PHOTO: Getty Images

This follows as Libya's major oil ports could open in days and boost supplies.

Libya has seen evidence of "good intentions" at indirect talks with eastern rebels which could lead to the lifting of their eight-month blockage, although divisions in the rebel camp may complicate matters.

(READ MORE: Power struggle disrupts oil port in Libya's far east)

May Brent crude rose 17 cents to 106.32 US dollars a barrel by 0713 GMT. It was down 1.6 per cent so far for the week, on course for its steepest weekly loss since losing nearly 5 per cent in the week to 3 January 2014.

U.S. crude for May delivery gained 31 cents to 100.60 US dollars a barrel. Front-month prices are set to post their 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.

"It's quite a sensitive development for the market because of its immediate impact," said Ric Spooner, chief analyst at CMC Markets in Sydney.

"Depending on how it's resolved, we might see Libya's production going up quite soon or not. It creates a difficult situation for traders to respond to."

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.

(READ MORE: Protests shut Libya's WAFA oil lines, threatens El Sharara)

Simmering tensions between Russia and the west over Ukraine provided a floor to oil prices.

Russia raised the gas price for Ukraine on Thursday for the second time this week, almost doubling it in three days and piling pressure on a neighbour on the brink of bankruptcy in the crisis over Crimea.

(WATCH VIDEO: Reflecting on the Russia/Ukraine saga)

The small movements in oil prices also reflected caution among investors ahead of the U.S. nonfarm payrolls data due later on Friday.

Economists polled by Reuters forecast a 200,000 increase in 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.

"The general expectation is that we will see jobs growth starting to get back on trend after winter," Spooner said.

"The market will take some comfort if it happens. I see the U.S. economy continuing its trend of growth and it's obviously an important factor for world oil demand."