LONDON

Brent North Sea crude for delivery in March rose 65 cents to $98.04 per barrel in London trade ahead of US gross domestic product (GDP) data, due for publication at 1330 GMT.

New York's main contract, light sweet crude for March, gained 28 cents to $85.92 a barrel.

"Without any doubt, focus will be on the US GDP release today," said Filip Petersson, an analyst at SEB Commodity Research.

"The outcome versus (analyst) expectations is most likely going to decide where crude oil prices will end up today. A positive surprise could send Brent above $100 a barrel even though we believe that the staying power at that level is limited.

"A negative surprise could release some more strength from Brent as several fundamental supports have weakened lately, for example temperatures have risen and Chinese product demand should be easing," Petersson added.

Amid high US inventories, OPEC kingpin Saudi Arabia this week suggested that the cartel could still raise its crude output to meet an increase in demand.

The Organization of Petroleum Exporting Countries (OPEC) could raise output to meet a "two percent" increase in demand during 2011, Saudi's oil minister Ali al-Naimi said on Monday.

Speaking at the Annual Global Competitiveness Forum in Riyadh, Naimi added that he expected average oil prices to be around last year's level of $80 despite a recent spike towards $100 a barrel in London.

Meanwhile the gap between Brent and New York has widened to a record, at more than $12 dollars, owing to the high level of crude stockpiles at the Cushing storage depot in Oklahoma.

"There's such a negative sentiment towards them (the Cushing inventories), everyone is clearing their positions, shifting across to the Brent," said Matt Smith of research group Summit Energy.

Smith also cited the poor US economic data out Thursday: higher jobless claims and disappointing orders of durable goods for additional pressure on New York crude.

S&P's shock downgrade of Japanese sovereign debt also fed market weakness, added Phil Flynn of PFGBest Research.

Standard & Poor's on Thursday cut Japan's credit rating for the first time since 2002, accusing the government of lacking a "coherent strategy" in efforts to ease the highest debt of any industrialized nation.

"Every time there is a concern about sovereign debt there's a bearish sentiment towards oil," said Flynn.