Brent crude oil climbed over $111 a barrel on Friday and looked set for the biggest monthly gain since August as prolonged unrest in Libya kept supply disruptions in focus.
More than 40 people were killed in an explosion at an army depot in southern Libya after locals tried to steal ammunition, the latest in a series of clashes highlighting the government's inability to restore order.
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But progress in settling the dispute over Iran's nuclear programme has kept gains in check.
Brent was up 55 cents at $111.41 a barrel by 1520 GMT. U.S. oil rose $1.46 to $93.76. There was no settlement because of the Thanksgiving holiday in the United States.
Libya's oil exports are down to a fraction of capacity due to seizures of oilfields and ports by militias, tribesmen and civil servants demanding more political rights or higher pay.
"In Libya, ongoing turmoil in the east of the country underscores the difficulties facing the North African country in bringing barrels back to the market," JBC Energy said.
Overall, however, supplies are adequate partly because a surge in U.S. crude production is reducing the top oil consumer's reliance on imports.
Rising volumes of U.S. shale are expected to keep a lid on oil prices next year. A Reuters monthly survey of 27 analysts projects Brent will average $104.10 in 2014, down from this year's closing average price so far of $108.50.
"We see global demand growing slightly next year with supply growing faster (and) that should lead to a modest decline in world oil prices," Pavel Molchanov of Raymond James said.
U.S. crude output last week exceeded 8 million barrels per day for the first time since January 1989, according to the U.S. Energy Information Administration. That helped push up crude stocks by almost 3 million barrels to 391 million barrels, their highest for November since records began in 1982.
The continuous rise in stockpiles, even though refineries ramp up runs to meet winter demand, is weighing on the U.S. benchmark, WTI crude, just as Brent remains supported. That is widening the difference between the two to nearly $20 a barrel, just off highs touched in March.
Expectations that more Iranian crude will come back to the market may also weigh on oil. Iran and six world powers clinched a deal on Sunday to curb its nuclear programme in exchange for initial sanctions relief.