UPDATE 6-Oil mixed, on track to end week up on Iran, Greece

Fri Feb 17, 2012 12:43pm EST

Related Topics

* Top European buyers of Iranian oil cut imports

* Upbeat mood on Greece ahead of Monday meeting

* Overbought signals pressure Brent (Recasts, updates prices, changes dateline previously LONDON and by-line)

NEW YORK, Feb 17 (Reuters) - Brent crude oil dipped on profit-taking on Friday after gaining for four straight days and hitting overbought conditions as it topped $120 a barrel.

But Brent crude remains on track for its fourth consecutive weekly gains, with prices elevated due to fears of supply disruptions in Iran and rising confidence that Greece will finally wrap a debt bailout deal by Monday.

U.S. crude rose for the third consecutive day, buoyed by a series of positive economic data, although a report on Thursday that U.S. consumer prices rose the most in four months in January due to a spike in gasoline prices raised concerns that higher energy costs could slow the economic recovery.

U.S. crude nonetheless was on course to post its second straight week of gains.

"Oil prices are back to the mixed price performance that has typified trade over much of the past week, with traders performing a daily assessment of what's hot and what's not," said Tim Evans, energy analyst at Citi Futures Perspective in New York.

In London, ICE Brent crude for April delivery was down 86 cents to $119.25 a barrel by 12:10 p.m. EST (1710 GMT). It had dropped to a session low of $118.85, after climbing to $120.70 in early trading, the highest intraday since June 15.

Brent crude's Relative Strength Index (RSI) fell back to 67.5, from 73.6 on Thursday, according to Reuters data. A reading of 70 is the threshold for overbought conditions.

U.S. NYMEX March crude was up 67 cents at $102.98, having risen earlier to a six-week high of $103.57.

Brent's premium against U.S. crude narrowed sharply to around $15.85, after closing at $17.47 on Thursday. CL-LCO1=R

"On the technical side, WTI (West Texas Intermediary crude) has held its ground, providing minor dips all week long (and) there has been good call spread buying all week long, providing for an upward bias." said Tony Rosado, options broker with GA Global Markets in New York.

IRAN TENSION, GREEK OUTLOOK

Iranian President Mahmoud Ahmadinejad, accused by the West of pursuing a nuclear weapons program, said in Pakistan that foreign nations were determined to dominate the region and that this should not be allowed. [ID: nL4E8DH804]

Admadinejad's remarks follows a string of belligerent comments from Iranian officials raising threats that Iran would retaliate in the wake of sanctions the West has imposed on Tehran due to its disputed nuclear program.

Iran's top oil customers in Europe are already making substantial cuts in imports ahead of European Union sanctions that take effect in July, reducing flows to the continent in March by more than a third, industry sources said.

This has increased demand for replacement barrels from Saudi Arabia, Iraq and Russia, leading to higher prices, although there is no shortage of actual supply.

Meanwhile, Greece edged closer to winning a second rescue package worth 130 billion euros ($170 billion) as officials in Athens said Germany was optimistic a deal could be struck despite misgivings over whether Greece would stick to its commitments.

Euro zone finance ministers are due to meet on Monday, and expectations that they will sign off a bailout deal for Greece increased after a proposal was dropped to withhold part of the agreement until after Greek elections expected in April.

Prices were also supported by more evidence of sustained recovery momentum in the U.S. economy. U.S. data on Thursday showed jobless claims falling to a near four-year low, solid growth in factory activity in the Mid-Atlantic area and a faster-than-expected rise in housing starts.

(Additional reporting by Jeffrey Kerr in New York, Peg Mackey in London, Jessica Jaganathan in Singapore; Editing by Marguerita Choy)

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