LONDON: Brent crude rose above $108 per barrel on Friday, supported by increased tension in Ukraine and limited supply from Libya, where a recent deal to reopen oil export terminals was expected to fall through.
Russian President Vladimir Putin visited Crimea for the first time since Russia annexed the peninsula from Ukraine, a move that angered the Ukrainian government and upset the West, while bloody clashes broke out between pro-Moscow separatists and Ukrainian forces in the port of Mariupol.
Separatists in eastern Ukraine ignored a public call by Putin on Thursday to postpone a referendum on self-rule, declaring they would go ahead on Sunday with a vote that could lead to war.
Investors worried that the spreading conflict could disrupt supply from Russia, the world's top oil producer.
Brent crude for June gained 53 cents to $108.57 per barrel by 1331 GMT, its highest in a week, after closing 9 cents lower on Thursday.
US oil was up 50 cents at $100.76, after settling 51 cents lower on Thursday.
The contract was on course for its first weekly gain in three, boosted by a surprise drop in US crude inventories last week, although total crude stocks remain close to record high levels.
A Libyan government deal to reopen major oil ports controlled by rebels was seen likely to unravel after the appointment of a new rebels-backed prime minister fuelled distrust and eroded support for the accord.
Still, Libya's government said it remained committed to implementing the agreement with rebels occupying the eastern ports of Ras Lanuf and Es Sider.
"The much-touted return of eastern Libyan ports only a few weeks ago has not really translated and if anything appears to be coming undone, so that clearly limits downside," said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas.
European Union governments have laid the groundwork for possible sanctions against Russian companies, including energy giants, over Ukraine, but diplomats said there was little appetite to impose any far-reaching measures for the time being.
The final decision on whether to impose any extra sanctions will only be taken by EU foreign ministers on Monday, after the independence referendum is due to take place in eastern Ukraine.
Oil investors were also watching the outcome of talks between Iran and world powers over ending Tehran's disputed nuclear programme, and the slow, steady progress was helping cap gains in oil prices.
Iran and six world powers held more talks that both sides described as useful, although a Western diplomat said they were still struggling to overcome deep disagreements on the future of Iranian atomic capabilities.
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