Oil futures were mixed in thin volume trade on Friday, with Brent pulling back late as investors exercised caution ahead of meetings starting Sunday where European leaders will try to hammer out a plan to address the region's debt crisis. US crude futures held on to gains as Wall Street equities advanced to their highest levels since early August on the latest dose of optimism about Europe's ability to resolve the sovereign debt woes.
France's push to use more European Central Bank money to fight the eurozone debt crisis has run into strong resistance from Germany and other EU partners ahead of two meetings on Sunday and Wednesday. "The market has given as much benefit of the doubt as it can regarding the solution for the eurozone debt crisis. Some selling is to be expected ahead of the weekend and the uncertainty of a plan being concluded next week," said John Kilduff, partner at hedge fund Again Capital LLC in New York.
ICE Brent December crude fell 20 cents to settle at $109.56 a barrel, seesawing in post-settlement trading and having retreated after reaching $111.88 and moving above the 100-day moving average of $111.82. Failure to push above the 200-day moving average of $112 helped trigger the late swoon, analysts and traders said.
Brent crude posted a 4.5 percent weekly loss, after two straight weekly gains. US December crude rose $1.33 to settle at $87.40 a barrel, having reached $88.89. A 60-cent gain for the week was the third consecutive weekly rise. Refined products futures also seesawed, with US heating oil futures ending lower and gasoline futures managing a small gain.
The spread between US front-month and nearby crude narrowed to less than 10 cents, threatening to move into backwardation, a condition where the front-month price exceeds the prices further out. Brent's premium to its US counterpart narrowed and was under $23 a barrel. Open interest for Brent crude futures reached a record 975,335 contracts, the IntercontinentalExchange said.
Speculators raised their net long position in US crude oil and options in the week to October 18, US Commodity Futures Trading Commission data showed. But trading volumes were thin, with volumes for both US crude and Brent under a half million lots. US volume was 30 percent below its 30-day average and Brent's 40 percent under.
US oil consumption in September rose 2.5 percent to 19.929 million barrels per day, bolstered by rising distillate fuel use, the industry group American Petroleum Institute said. The API's figure was higher than the US Energy Information Administration's preliminary estimate of fuel consumption at 18.972 million bpd for the month.
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