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Singapore - Brent futures climbed above $108 a barrel on Friday, extending sharp overnight gains amid heightened geopolitical concerns after a Malaysian jetliner was shot down over eastern Ukraine.
Oil prices on both sides of the Atlantic surged about 2% on Thursday, recovering from a weeks-long decline, on news of the crash that came a day after the United States slapped sanctions on Russia's biggest firms for the first time after Moscow's failure to curb violence in Ukraine.
Brent climbed 36 cents to $108.25 a barrel by 05:33 GMT after rising 72 cents in the previous session. US crude rose 46 cents to $103.65 after closing $1.99 higher.
Both benchmarks were on track for the first weekly gain in four weeks.
"The news last night is the catalyst to push oil higher," said Jonathan Barratt, chief executive of Sydney commodity research firm Barratt Bulletin, referring to the downing of the Malaysian passenger plane that killed all 298 people on board.
The rebound in prices was stronger due to the "aggressive sell down" in oil since mid-June, he added, with the downing of the jetliner serving to renew geopolitical risks in Libya, Iraq, Iran and Israel.
The sell-off in oil futures was now over, said Ken Hasegawa, commodity sales manager at Tokyo's Newedge Japan.
"Now the market will be moving back to its normal range," he said.
Brent was likely to trade between $107 and $112 a barrel, while West Texas Intermediate would range between $100 and $105, unless there were further shocks from the political situation in Ukraine and the Middle East.
The spread between the two would stabilise at $5 to $7, Hasegawa said, adding that the Israeli ground offensive in Gaza that started on Thursday was driving up oil prices.
Brent and US crude were also supported by data from the United States and China earlier in the week that indicated an improving demand outlook in the world's top two oil consumers.
While data from China showed slightly stronger-than-expected second-quarter growth of 7.5% and higher oil demand, a report from the United States showed a larger-than-expected draw in crude stocks of 7.5 million barrels last week.
"It does paint a bullish picture. We are now in an upswing phase," Barratt said.
Investors would watch Ukraine and Libya for further trading cues.
"The turnaround in risk sentiment after a downgrading of the geopolitical risk premium over the past couple of weeks should see prices push higher from here," said ANZ in a note on Friday.
US President Barack Obama warned Russian President Vladimir Putin on Thursday of additional sanctions on Moscow if it does not change course in Ukraine, a day after the US imposed sanctions on a raft of companies including Rosneft, Russia's top oil producer.
In Libya, a protest by oil security guards continued at Brega port, halting oil production at state-run Sirte Oil Co. The country is producing around 555 000 barrels a day of oil, a spokesperson for state-run National Oil Corp said on Thursday.
Libya has asked the UN Security Council for help to protect its oil installations, oil export ports and civil airports, warning that without more international assistance the North African oil producer could become a failed state.
Oil prices on both sides of the Atlantic surged about 2% on Thursday, recovering from a weeks-long decline, on news of the crash that came a day after the United States slapped sanctions on Russia's biggest firms for the first time after Moscow's failure to curb violence in Ukraine.
Brent climbed 36 cents to $108.25 a barrel by 05:33 GMT after rising 72 cents in the previous session. US crude rose 46 cents to $103.65 after closing $1.99 higher.
Both benchmarks were on track for the first weekly gain in four weeks.
"The news last night is the catalyst to push oil higher," said Jonathan Barratt, chief executive of Sydney commodity research firm Barratt Bulletin, referring to the downing of the Malaysian passenger plane that killed all 298 people on board.
The rebound in prices was stronger due to the "aggressive sell down" in oil since mid-June, he added, with the downing of the jetliner serving to renew geopolitical risks in Libya, Iraq, Iran and Israel.
The sell-off in oil futures was now over, said Ken Hasegawa, commodity sales manager at Tokyo's Newedge Japan.
"Now the market will be moving back to its normal range," he said.
Brent was likely to trade between $107 and $112 a barrel, while West Texas Intermediate would range between $100 and $105, unless there were further shocks from the political situation in Ukraine and the Middle East.
The spread between the two would stabilise at $5 to $7, Hasegawa said, adding that the Israeli ground offensive in Gaza that started on Thursday was driving up oil prices.
Brent and US crude were also supported by data from the United States and China earlier in the week that indicated an improving demand outlook in the world's top two oil consumers.
While data from China showed slightly stronger-than-expected second-quarter growth of 7.5% and higher oil demand, a report from the United States showed a larger-than-expected draw in crude stocks of 7.5 million barrels last week.
"It does paint a bullish picture. We are now in an upswing phase," Barratt said.
Investors would watch Ukraine and Libya for further trading cues.
"The turnaround in risk sentiment after a downgrading of the geopolitical risk premium over the past couple of weeks should see prices push higher from here," said ANZ in a note on Friday.
US President Barack Obama warned Russian President Vladimir Putin on Thursday of additional sanctions on Moscow if it does not change course in Ukraine, a day after the US imposed sanctions on a raft of companies including Rosneft, Russia's top oil producer.
In Libya, a protest by oil security guards continued at Brega port, halting oil production at state-run Sirte Oil Co. The country is producing around 555 000 barrels a day of oil, a spokesperson for state-run National Oil Corp said on Thursday.
Libya has asked the UN Security Council for help to protect its oil installations, oil export ports and civil airports, warning that without more international assistance the North African oil producer could become a failed state.
