Brent futures held above $109 per barrel on Friday as fresh tensions over Ukraine kept them on course for their biggest weekly rise since mid-April, while returning Libyan supply capped gains.
US crude futures were also heading for their best week in more than a month, bolstered by data indicating the US economy could be firming.
US Secretary of State John Kerry warned Russia it faced broader economic and industrial sanctions from the US and Europe if it meddled in Ukraine’s presidential elections on 25 May.
“The situation with Ukraine is stopping [oil] sellers being too aggressive,” CMC Markets chief market analyst Ric Spooner told Reuters.
Price differentials between Brent contracts for June and July also helped push prices higher Newedge Japan commodity sales manager Ken Hasegawa told Reuters.
“Brent is trying to fill the gap between the June contract, which expired on Thursday and the new contract for July,” Hasegawa said.
Brent crude for July delivery had risen $0.25 to $109.34 per barrel by Friday morning, up from $109.09 after the new front contract took effect.
“Fewer US jobless claims offset weaker production data and tempered any weakness in the economy,” Spooner said.
US unemployment claims dropped to a seasonally adjusted 297,000 last week – the lowest since May 2007.
But gains in US crude prices could be tempered following the release of housing starts figures at Friday morning, which Spooner said might miss forecasts.
Total US crude inventories climbed to 398.5 million barrels in the week to 9 May, although stocks at the key Cushing, Oklahoma delivery hub fell by 592,000 barrels, government data showed.
Brent could also face headwinds from the gradual resumption of output from Libya, where the El Feel oilfield has returned to full capacity and the Wafa field is operating after being blocked by protesters.
Libya’s oil output is 300,000 barrels per day after the two fields came back on line, the National Oil Corporation said.
Investors are also keeping an eye on talks due to end Friday over Tehran’s nuclear programme.
Iran could be curbing its crude exports within limits agreed in November by Tehran and the six powers as part of the interim pact which partially eased sanctions over the nuclear programme.
Iran’s oil exports averaged 1.11 million barrels per day in April, the second month in a row exports have fallen, the Paris-based International Energy Agency said.