Crude Oil Squeezed by Lower Domestic Demand
Brent crude oil steadied above $107 a barrel on Friday on speculation U.S. jobs data would confirm accelerating economic growth in the world's top oil consumer.
U.S. non-farm payrolls data were due at 1330 GMT and a Reuters poll pointed to a recovery in U.S. jobs growth to 185,000 in January from a disappointing 74,000 in December.
The bullish outlook was reinforced by a report showing the number of Americans filing new unemployment benefit claims fell slightly more than expected last week.
"The market is turning its attention to macro headlines and the U.S. jobs report," VTB Capital oil strategist Andrey Kryuchenkov said.
"But we expect London's benchmark to remain range-bound. Even a better-than-expected reading will only offer limited support as there is little on the fundamental side to keep this market rallying."
Brent crude was up 5 cents at $107.24 by 1150 GMT, after rising 0.9 percent in the previous session - its biggest daily gain since Jan. 22.
U.S. crude was down 40 cents at $97.44, squeezed by expectations of lower U.S. domestic demand during the peak refinery maintenance season over the next few months.
Brent's premium to the U.S. benchmark <CL-LCO1=R> was around $9.70 a barrel. The spread narrowed to $7.94 a barrel on Wednesday, the tightest since Oct. 10.
If the non-farm payrolls data delivers further signs of U.S. economic growth, economists say it could prompt the Federal Reserve to limit further its monetary stimulus programme that has helped support risky assets such as commodities.
But traders reckoned it would take a significant deviation from expectations for the data to shake the oil market.
"The market will be fairly tolerant and not really think in terms of tapering unless we see very good or very bad numbers," said Ric Spooner, chief market analyst at CMC Markets.
Tighter supply of North Sea crude in March could support the Brent benchmark. Loading of the four crude streams Brent, Forties, Oseberg and Ekofisk (BFOE) will average 890,000 barrels per day (bpd) in March, down from an expected 1.03 million bpd in February, according to loading programmes.
Investors will also keep a close eye on Saturday's talks with Iran as the U.N. nuclear watchdog hopes to persuade the Islamic state to start addressing long-held suspicions it has worked on designing a nuclear bomb.
Tough international sanctions over the past two years have cut Iran's oil exports in half