Brent crude oil was little changed in choppy trading on Friday as investors moved to square positions following one of the international benchmark's biggest weekly falls this year due to reduced concerns over exports from strife-torn Iraq.
Prices have dropped more than $2 from a nine-month high of $115.71 hit on June 19 as output from Iraq's southern oilfields, which produce most of the nation's 3.3 million barrels per day (bpd), remained unaffected by fighting in the north and west.
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"A lot of people are very long, the market's gotten a little top-heavy, and we're susceptible to a correction," said Stephen Schork, editor of The Schork Report in Villanova, Pennsylvania.
Libya's eastern oil port of Hariga completed the loading of a tanker carrying 600,000 barrels of crude oil destined for Italy on Friday after a protest by security guards ended, the port operator said, further easing supply worries on the world market.
Brent rose 9 cents to settle at $113.30 a barrel, after falling 79 cents in the previous session. It lost more than 1.3 percent this week, its steepest weekly fall since March.
U.S. crude fell 10 cents to settle at $105.74 a barrel after ending Thursday 66 cents weaker at $105.84, the lowest settlement since June 11. U.S. crude lost nearly 1.4 percent during the week, and has fallen $2 since hitting $107.73 on June 20.
The spread between the two benchmarks closed the week at $7.56 after having widened to $9.67 on June 19, when Brent hit its 9-month peak.
If fighting between Sunni militants and Iraq government forces is contained in regions north of Baghdad then the chance of supply disruptions will shrink, risk analysts said.
"Two weeks after the beginning of the latest chapter in the history of modern-era Iraq, only an actual disruption to supply would trigger (major) buying in the oil market," said David Hufton, managing director of London brokerage PVM Oil Associates.
Investors are still watching how the fight for control of Iraq's largest refinery, the 300,000-bpd Baiji complex, unfolds.
Also weighing on crude was news that Libya's oil output has risen to 300,000 bpd after the El Feel oilfield in the southwest increased production.
A spokesman for Libya's National Oil Corp (NOC) said El Feel was pumping 105,000 bpd after resuming operations following the end of a protest this month.
Ric Spooner, chief markets analyst at CMC Markets, said although Iraq's oil production and exports remained at risk from the Sunni Islamist insurgency across the north of the country, investors were worrying less.
"The risks can't be dismissed, but the fact time has gone by suggests investors are getting (less) nervous about the risk premium."
Pro-Russian separatist leaders voiced willingness to extend a shaky ceasefire in Ukraine's Russian-speaking east on Friday, after releasing four out of eight international observers captured over a month ago, in an apparent goodwill gesture.
Weaker-than-expected U.S. data was also negative for oil.
Data on Thursday showed U.S. consumer spending rose less than forecast in May, prompting economists to downgrade estimates for second-quarter growth, muddying the outlook for demand in the world's top oil consumer.
Hedge funds and large money managers cut their net long U.S. crude futures and options positions in the week to June 24, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
The speculator group cut its combined futures and options position in New York and London by 13,711 contracts to 383,983 during the period.
(By Anna Louie Sussman; Additional reporting by Christopher Johnson in London, Keith Wallis in Singapore; Editing by Chizu Nomiyama; Editing by Dale Hudson, Jason Neely, Peter Galloway and Meredith Mazzilli)