Oil ends positive week higher on supply concerns

Oil ends positive week higher on supply concerns

Oil rose in thin holiday trade on Friday as fresh protests in Egypt once again stoked supply concerns, with additional support coming from optimism about talks on releasing aid to Greece.

Crude prices moved higher as US equity markets got a boost from hopes for strong consumer buying on "Black Friday", the start of the holiday shopping season.

After hostilities between Israel and Palestinians bolstered prices earlier in the week, traders were closely watching violence erupting in Egypt stirred by a decree by President Mohamed Mursi that put his decisions above legal challenge.

Protesters accused him of launching a "coup", while oil traders were once again on watch for any potential spillover that could impact Middle East oil supplies.

Markets also found support after Greece said the International Monetary Fund had relaxed its debt-cutting target for the country, suggesting lenders were closer to a deal for a vital aid tranche to be paid. Worries about the euro zone crisis - and the impact on struggling fuel demand - have weighed on crude prices throughout the year.

In addition, German business sentiment surprised with a rise in November, breaking a six-month run of declines. The closely watched Munich-based Ifo think tank said its business climate index rose to 101.4, beating forecasts.


"It looks like there's some strength in the oil market today on the back of high hopes on a stronger (European Union)," said Carl Larry, president of Oil Outlooks and Opinions LLC.

"Something that might be going unnoticed has been the consistent reports of strong retail sales today for Black Friday."

Trading ended early after the US Thanksgiving holiday, and many players were off. Brent crude futures rose 83 cents to settle at $US111.38 a barrel and closed the week up $US2.43.

Brent trading volumes were nearly 60 per cent below the 30-day moving average, while US crude volumes were down almost 75 per cent.

Front-month US crude gained 90 cents to settle at $US88.28 a barrel, up $US1.61 on the week. US crude also found some brief support on news of a spill on Enbridge's 318,000-barrels-per-day Line 14 near Mokena, Illinois.

The company later said the line had been shut on Tuesday and restarted later in the day.
Traders were also keeping a close eye on the fragile, two-day truce between Israel and Palestinians, after the hostilities sent Brent prices to one-month highs this week.


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