Crude oil rose on Friday, with Brent above $115 a barrel, as Libyan rebels vowing "victory or death" advanced towards a major oil terminal, and on protests in Saudi Arabia's oil-producing Eastern Province.
By 1111 GMT, Brent crude futures for April delivery were up 75 cents to $115.54 a barrel, after earlier touching $116.20. U.S. crude futures for April <CLc1 rose 64 cents to $102.55 a barrel, but earlier rallied by over $1 to $103.03.
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Investors and traders have been nervously tracking the civil unrest in North Africa and the Middle East for any sign that Saudi Arabia, OPEC's leading oil producer, would be affected.
On Thursday Saudi Shi'ites staged protests in two towns in its oil-producing Eastern Province, demanding the release of prisoners they say are being held without trial.
In Libya, opponents of Libyan leader Muammar Gaddafi prepared to march in the capital after Friday prayers, at about 1300 GMT. They said they expected government forces to respond with a violent crackdown.
Rebels also advanced on the major oil terminal of Ras Lanuf, with Al Jazeera television reporting that battles were under way in the eastern oil port. Earlier, an air strike had missed a rebel-held eastern military base which houses a big ammunition store.
Eastern-based rebels told Reuters they were open to talks only on Gaddafi's exile or resignation following attacks on civilians that have brought global condemnation and triggered a probe at the war crimes court.
Commerzbank analyst Carsten Fritsch said nobody now expected Venezuelan President Hugo Chavez's proposals for an international panel to negotiate an end to the turmoil to work.
"The rebel leader has rejected the plan and the continued air attacks by Gaddafi's forces on the rebel strongholds give little reason for the rebels to return to the table," he said.
The market is also focusing on the Shi-ite protests in Saudi Arabia, although Christophe Barret, global oil analyst at Credit Agricole Corporate and Investment Bank, said he thought the risks were exaggerated.
"Saudi Arabia is the main risk in the region -- it has all the spare capacity, and if there is unrest and production disruption then it means an explosion in oil prices. But I think the risk is an exaggeration," he said.
He argued there were always problems between the Shi-ites and the Sunnis. "I don't think it will go like Libya, but the Eastern Province is a significant oil producing province of Saudi Arabia so that is why everyone is looking at it."
Unrest continues in other parts of the region. Shi'ite Muslim rebels in northern Yemen said the military had fired rockets at their anti-government protests.
In Bahrain several people were reported hurt in fighting between Sunni and majority Shi'ite Muslims.
Libya's oil output has fallen to 700,000-750,000 barrels per day (bpd) from normal levels of 1.6 million bpd as most foreign oil workers have taken flight, according to Shokri Ghanem, the head of Libya's state-owned oil company.
Simon Wardell, oil analyst at IHS Global Insight, attributed the morning rally partly to oil prices playing catch up after Thursday when positive economic news lifted equities.
"Oil suffered a bit in comparison, but it came back to par this morning," he said. "Now it is settling back down."
The U.S. dollar traded flat against a basket of currencies as the euro strengthened following the European Central Bank's hawkish comments about rate rises on Thursday. A weaker dollar is supportive for oil prices.
"(ECB chairman) Mr Trichet did surprise by announcing an almost certain increase in rates from 1.00% to 1.25% at the next meeting in April (much earlier than expected)," Petromatrix analyst Olivier Jakob said in a note.
The market is now looking to U.S. non-farm payrolls data due later on Friday. Employment is expected to have increased by 185,000 in February, which would be the largest gain in almost a year.
"If we see some strong numbers, that could give some further support," said Commerzbank's Fritsch.