LONDON: Brent crude rose on Friday, boosted by gains in equity markets and delays on key North Sea crude oil loadings.
Brent crude for November gained $1.20 to $113.50 a barrel by 1313 GMT. In choppy trading, Brent turned briefly negative, before recouping those losses.
US crude fell 65 cents to $88.75. The November Brent contract and prompt US crude have risen about 2 percent so far this week.
"Brent futures strengthened as central banks teamed up to jointly provide European banks with additional funding," Vienna-based JBC Energy said in its daily research note.
"The joint action comes as a (temporary) relief for the banking system at a time when international investors are increasingly reluctant to lend money. The move also sparked a rally on European stock markets."
World share prices rose over half a percent to one-week highs on hopes that European policymakers might at last come up with measures to combat a deepening debt crisis.
European shares were rising in early trading led by banks, extending its rally. The FTSEurofirst 300 index of top European shares was up for the fourth day
US Treasury Secretary Timothy Geithner urged euro zone ministers to leverage their 440 billion euro bailout fund and free more resources to tackle the debt crisis during a meeting on Friday, a senior euro zone official said.
North Sea Forties crude, one of the key crude oil streams used to price about two thirds of global physical oil, has been suffering from production problems and loading delays since May, supporting Brent crude futures.
Shipments of Forties crude oil are being further delayed due to production shortfalls, trade sources said on Thursday.
But some analysts said any gains were likely to be short lived as the European debt problems were deep rooted, keeping oil demand in most developed countries weak.
"The actions taken yesterday were just an electric shock to keep the patient alive — we still have serious debt problems in Europe," said Thorbjørn Bak Jensen, oil analyst with Global Risk Management.
The economic weakness is now being reflected in U.S. oil demand readings. The nation’s total fuel consumption over the past four weeks fell 0.9 percent from a year earlier, while gasoline use over the summer declined to an eight-year low, according to the Energy Information Administration. –Additional reporting by Alejandro Barbajosa in Singapore.
