* U.S. consumer confidence hits nine-month high
* Brent/WTI spread narrows further to $3.26 a barrel
* IEA cuts forecast for global oil demand growth in 2014
* Putin says European gas contracts will be honored
* Market awaits resumption of Libyan oil exports
(Adds settlement prices, CFTC data and analyst comment)
By Elizabeth Dilts
NEW YORK, April 11 U.S. crude oil rose to near a
six-week high on Friday, steered by stronger gasoline demand and
a positive consumer confidence report, but gains were capped by
profit taking and a declining demand outlook.
The International Energy Agency lowered its global demand
forecast for 2014 due to expectations that more Libyan crude
will reach the market next week, pushing Brent prices lower.
U.S. crude moved in tandem with U.S. gasoline prices, which
surged early in the session due to government data released
mid-week that showed a substantial draw on stockpiles, signaling
robust demand before the start of summer driving season.
Data showing U.S. consumer sentiment rose to a nine-month
high in April also provided support, and pushed the American
benchmark's price discount to Brent to its narrowest since
Brent's price slipped after Russia backed off threats it
made Thursday to disrupt Ukraine's natural gas supply, and
therefore Europe's, unless Kiev paid its bill. Russian President
Vladimir Putin guaranteed Friday "fulfillment of all our
obligations to our European consumers."
"The reason we had a late day sell off is book squaring,"
said Phil Thompson, director of Mobius Risk Group in Houston.
"Once U.S. crude got up to $104.50 there was profit taking, and
RBOB had correlated moves with (U.S. crude) all day" triggering
a sell off in gasoline, as well, Thompson said.
U.S. oil rose by as much as $1.04 to a session high
of $104.44, before giving back much of its gains to settle 34
cents higher at $103.74 a barrel. The May contract rose nearly
2-1/2 percent on average over last week.
U.S. gasoline RBOB rose by as much as 3.35 cents to a
session high of $3.0381 per gallon, but gave up most gains to
settle 0.65 cents higher at $3.0144 per gallon.
Brent crude settled 14 cents lower at $107.33 a
barrel, but still ended the week 0.5 percent higher on average.
The Brent-U.S. crude oil spread CL-LCO1=R contracted as
tight as $3.26, and settled at $3.59, its narrowest settlement
since Sept. 19.
Both contracts were pressured after the IEA said in a
monthly market report that global demand growth would average
1.29 million barrels per day (bpd) in 2014, down 60,000 bpd from
its previous forecast.
This followed a similar trimming of the demand forecast by
the Organization of the Petroleum Exporting Countries in its
monthly report on Thursday to 29.65 million bpd in 2014, down
50,000 bpd from the previous estimate.
Tensions between the West and Russia over Ukraine remained a
potential market mover after U.S. President Barack Obama and
German Chancellor Angela Merkel discussed further sanctions
against Russia, calling on Moscow to move its troops back from
the border region.
The possibility that Libyan oil exports will pick up next
week if some of its oil ports reopen remains as a bearish factor
in Brent prices.
Libya's state National Oil Corp lifted a force majeure for
the eastern port of Hariga on Thursday, but the country's two
biggest ports, Es Sider and Ras Lanuf, remain blocked.
Late on Friday, the U.S. Commodity Futures Trading
Commission released data showing the speculator group increased
their net long U.S. crude futures and options positions in the
week to Tuesday, April 8.
(Additional reporting by Claire Milhench in London and Manash
Goswami in Singapore; Editing by Keiron Henderson, James
Dalgleish and Tom Brown)