* U.S. job growth surges, unemployment rate near six-year
* Asian stocks, dollar rise on upbeat U.S. jobs data
* Iraqi Kurds say will sue Baghdad if it blocks oil sales
* Islamic State seizes oil field and towns in Syria's east
By Manash Goswami
SINGAPORE, July 4 Brent futures held steady
around $111 a barrel on Friday on signs of an improving demand
outlook, although the benchmark is still set to post its biggest
weekly loss since early January as supply worries that have
rattled oil markets for weeks recede.
U.S. oil futures are down for a seventh straight day amid
expectations of more shipments from Libya and Iran. The last
time the contract fell for so many days was in December 2009.
Yet hopes of an improved demand outlook in the United States
and China and worries that the Iraqi crisis may spin out of
control mean losses will be limited.
Brent crude rose 7 cents to $111.07 a barrel by 0453
GMT and looks set to lose 2 percent this week.
U.S. oil lost 7 cents to $103.99 a barrel and is set
to end the week down 1.7 percent, the biggest weekly loss since
"Supply fears are easing somewhat, but Iraq is setting a
high floor on prices," said Victor Shum, vice-president of
energy consultancy IHS Energy Insight. "It's a combination of
improving demand outlook and supply worries. One would have to
be really brave to sell in this market."
The twin factors will keep the U.S. benchmark above $100 a
barrel, Shum said.
Investors are watching the progress of talks between Tehran
and world powers to end the decades-old dispute over its
controversial nuclear programme. Iran has reduced demands for
the size of its future nuclear enrichment programme although the
West is urging Tehran to compromise further.
Prospects of further easing of sanctions and more Iranian
oil hitting the market come a day after Libyan Prime Minister
declared an end to an oil crisis that has cut exports from the
OPEC member to a trickle.
"If it wasn't for the situation in Iraq, with the
possibility of higher Libyan supplies, more Iranian oil, we
would have seen prices a lot lower," Shum said.
On the demand front, U.S. employment growth jumped in June
and the jobless rate closed in on a six-year low, pointing to
decisive evidence the country was growing briskly heading into
the second half of the year.
The positive signs of growth from the United States closely
followed data from China that showed factory activity there hit
multi-month highs in June, adding to sentiment that demand for
oil would remain solid.
Broader financial markets - including Asian shares and the
dollar - firmed after the U.S. jobs data report.
But investors are still nervous about the unfolding crisis
in OPEC's second-largest producer Iraq. Its autonomous Kurdish
region has hit back at Baghdad over independent oil exports,
with the Kurdistan Regional Government (KRG) threatening in a
letter to countersue the central government for trying to block
Militants from the Islamic State group also seized Syria's
largest oil field from rival Islamist fighters on Thursday,
strengthening its advance across the eastern Deir al-Zor
province, an opposition monitoring group said.
However, the change in control of the field should have
little impact on global oil markets. Syria is not a significant
producer and has not exported any oil since late 2011, when
international sanctions took effect to raise pressure on
President Bashar al-Assad.
(Reporting by Manash Goswami; Editing by Tom Hogue)