* Libya says will take to court foreign firms buying oil
* U.S. crude stockpiles fall, but rise at Cushing delivery
* Dollar strengthens to seven-week high, weighing on oil
By Jacob Gronholt-Pedersen
SINGAPORE, Jan 9 Brent crude rose towards $108 a
barrel on Thursday, supported by continued concerns over supply
from the Middle East and North Africa, but gains were capped by
a stronger dollar.
Brent has traded in a tight range this week as investors
balanced expectations of rising supply from Libya with increased
tensions between government forces and armed rebels in the North
"Brent looks relatively stable at the moment compared to
WTI," said Ric Spooner, market strategist at CMC Markets in
Sydney. "Brent is hanging around its 200-day moving average at
the moment, and that is creating some nausea for investors, who
are looking for direction in the market."
Brent crude for February delivery was 28 cents
higher at $107.43 per barrel at 0335 GMT, after settling 20
U.S. oil was up 33 cents at $92.66. The contract shed
$1.34 to end at a six-week low on Wednesday as a large build in
crude stockpiles at the contract's delivery point in Cushing,
Oklahoma, weighed on the market.
While the Cushing stocks rose, total U.S. crude stocks fell
by 2.7 million barrels in the week to Jan. 3, data from the U.S.
Energy Information Administration (EIA) showed.
The overall crude inventories fell for the sixth straight
week, totalling 33.5 million barrels for the period, the largest
six-week drop since October 1990.
The drop comes ahead of refiners entering maintenance
season, which will cut demand for crude. Still, the commercial
stocks remain near historical highs due to growing oil
production in the United States.
SEE YOU IN COURT
Libya said Wednesday it will stop doing business with and
take to court any foreign firms trying to buy oil from eastern
ports seized by armed protesters.
The statement came after tensions built this week with
rebels inviting foreign firms to buy crude from them and the
Libyan navy firing at a tanker trying to load crude in a
terminal occupied by rebels.
That has raised new worries about the country's exports
despite a return of some of its production.
Brent prices fell as much as $6 per barrel last week, after
the news that Libya would restart its key El Sharara oil field.
The country is currently producing around 650,000 barrels
per day (bpd) of oil, of which 510,000 bpd is being exported,
Oil Minister Abdelbari Arusi told Reuters on Wednesday.
Gains in Brent were limited by a stronger dollar,
which hit a seven-week high against a basket of major
currencies. A stronger dollar makes commodities priced in the
greenback more expensive to holders of other currencies.
Investors will look to U.S. non-farm payrolls on Friday for
signs of continued recovery in the world's largest economy,
which may bolster speculation of imminent cuts in the Federal
Reserve's commodity-friendly stimulus programme.
(Reporting By Jacob Gronholt-Pedersen; Editing by Tom Hogue)