Oil higher to end best week in 2 years

SAN FRANCISCO (MarketWatch) — Crude-oil futures ended moderately higher Friday, as investors remained concerned about unrest in Libya and other Middle Eastern and North African countries, but gains were limited by assurances that other oil-producing nations could make up for production losses.

Light, sweet Crude for April delivery (CLJ11 98.23, +0.95, +0.98%) added 60 cents, or 0.6%, to settle at $97.88 a barrel on the New York Mercantile Exchange.

Never mind the relatively lackluster Friday: oil gained 14% this week, its biggest weekly percentage increase since January, 2009. Oil has settled higher in six out of the last seven sessions.

The week included a rollover from the March contract to the April contract. Weekly gains in terms of the April contract reached 9.1%.

Concerns about supplies in Libya due to the country’s unrest and fears of contagion to other Middle Eastern and North African nations roiled markets this week.

Other energy products such as gasoline posted fresh multi-year highs.

The front-month April Brent crude contract at London’s ICE also settled higher, up 78 cents, or 0.7%, to trade at $112.14 a barrel.

Some renewed buying interest in oil as well as other commodities such as gold came later in the session, as some traders positioned ahead of the weekend, trying to avoid staying out of the market ahead of the weekend –- with its potential for more unrest and laden with uncertainties.

Oil traded slightly lower for most of the session.

“We seemed to have wakened up to a calmer atmosphere in the market,” said Matt Smith, an analyst with Summit Energy in Kentucky.

While Libya’s production is compromised, traders have taken “comfort” from statements by the Saudis and organizations such as the International Energy Agency about spare capacity and use of emergency stockpiles, he added.

The market “appears to be taking the loss of most Libyan barrels as a given but does not expect further problems,” JBC Energy analysts said in a note to clients Friday.

Other analysts have cautioned, however, that Saudi Arabia’s heavier, sour crude oil — more costly and time-consuming to refine — is not a perfect substitute for Libya’s lighter, sweeter product.

“Complex refineries with ample coking and sulfur recovery capacity will fare better in this environment than those geared to running the higher-grade feed. However, from a global fuel supply perspective, we think there is plenty of spare refining capacity right now to convert additional sour barrels into products,” Tim Evans, an analyst with Citigroup’s Citi Futures Perspective wrote in a note to clients earlier this week.

Crude futures surged in recent sessions to levels not seen since the second half of 2008, breaching the key $100-a-barrel level, but ended on a weaker note Thursday.

(Source: http://www.marketwatch.com/story/oil-futures-hover-below-100-a-barrel-2011-02-25?siteid=rss&rss=1)