Oil Up Slightly As Libya, Fed Support; Iran Weighs
NEW YORK, Nov 15 (Reuters) - Oil rose slightly on Friday in choppy trade as markets weighed Libyan supply outages and supportive comments from the Fed chair nominee against reports that a deal with Iran may be near on its nuclear program.
Both Brent and U.S. oil prices fell earlier on the reports that a senior U.S. official said a deal with Iran on its nuclear program was "quite possible" next week when world powers meet in Geneva.
Sanctions against Iran because of its nuclear program have kept some 1 million barrels of oil off the global market. Any agreement among nations could mean sanctions will be lifted, increasing market supply and depressing prices.
Brent crude for January delivery, in its first day as the new front-month, ended 22 cents higher at $108.50 a barrel, after trading as high as $108.65.
The contract ended with a 3.2 percent rise on the week, the biggest weekly gain since July 5, as supply outages in Libya and comments from President Barack Obama's nominee to lead the Fed supported prices.
U.S. crude ended up 9 cents at $93.84 a barrel after trading up to $94.55. It ended with its sixth straight week of losses as supplies remain high. The December U.S. crude oil futures contract expires at the end of trading on Wednesday.
Traders closing out options positions ahead of the contract expiry contributed to the swings in trading on Friday, said Rich Ilczyszyn, chief market strategist at iitrader.com in Chicago.
"The market will be rangebound until we get the expiration out of the way," he said.
U.S. gasoline futures fell by as much as 1.5 percent in late afternoon trade after the U.S. Environmental Protection Agency proposed a reduction in required biofuel blending volumes for 2014, indicating the cost of making gasoline will drop so supplies may rise.
U.S. RBOB gasoline fell 2.6 cents to settle at $2.6577 a gallon after trading to a low of $2.6411.
Traders were also eyeing a fire that caused one death at Chevron's 330,000 barrel-per-day refinery in Pascagoula, Mississippi.
Fed And Libya Support, Supply Weighs
Janet Yellen, likely to be the next Fed chief, defended the U.S. central bank's commodity-friendly economic stimulus measures, suggesting that any tapering would not be imminent under her watch.
The market was beginning to "show signs of support on Fed policies" but was still "stabilizing," said Gene McGillian, analyst with Tradition Energy in Stamford, Connecticut.
While her comments provided a boost to risk appetite, with most commodities and equities scaling higher, big stockpiles kept U.S. crude in check.
The market is anticipating refiners returning from seasonal maintenance to draw down high crude oil stocks after government data showed supplies rose by more than double the forecast last week.
Brent's premium to U.S. oil futures <CL-LCO1=R> settled at $14.01 per barrel after reaching an eight-month high of $15.87 on Thursday.
The International Energy Agency said that while oil markets look well supplied in the short term, prices could rise in the next few months due to a seasonal increase in demand and output disruptions in some OPEC nations such as Libya and Iraq.
Libyan oil output is down to a fraction of its capacity of 1.25 million barrels a day. Protests at oil ports have cost Libya more than $6 billion and started hitting power supplies in the North African country.
On Friday, some 13 people were killed and more than 130 wounded in fighting between Libyan militiamen and armed residents in Tripoli, according to the Libyan state news agency.
In Iraq, the government has moved swiftly to restore calm at its giant southern oilfields following violent protests. Schlumberger Ltd, the world's top oil services company, is expected to return to work next week at Iraq's biggest field, Rumaila.
(Reporting by Jeanine Prezioso; Additional reporting by Peg Mackey in London and Jacob Gronholt-Pedersen in Singapore; Editing by Dale Hudson, David Evans, John Wallace, Bob Burgdorfer and Chizu Nomiyama)
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