LONDON: Oil rose above $110 a barrel on Friday and was on track to end higher for the second week running, as expectations dwindled of an imminent breakthrough in talks over Iran's nuclear programme.
Iran and six world powers struggled on Friday to budge sticking points in negotiations aimed at securing an interim accord to curb Tehran's nuclear programme in exchange for sanctions relief.
"There's not a lot of optimism to find in the Iran negotiations after yesterday," said Bjarne Schieldrop, chief commodity analyst at SEB.
Brent for January delivery was up 22 cents at $110.30 per barrel at 1104 GMT.
US crude was trading 24 cents lower at $95.20 per barrel, after posting its biggest gain in nearly two months on Thursday.
Sanctions on Iran have kept around 1 million barrels per day of oil from the global market and any deal could allow some of that oil to be sold, potentially bringing down prices.
Adding to pressure on negotiators, US Senate Majority Leader Harry Reid said on Thursday he was committed to moving ahead with a tougher Iran sanctions bill.
"The focus is going to be about Iran and it doesn't seem that everything is going to be done today.
It risks slipping into the weekend," Petromatrix analyst Olivier Jacob said.
The premium of Brent oil futures to US oil was at $15.10, nearing its highest closing level since March, primarily due to high stockpiles in the United States and seasonal factors, according to SEB's Schieldrop.
"We've probably reached the high end from now until Christmas with a decline in crude stock in the Gulf starting to ease the spread," he said.
China's oil demand is expected to rise an average 3.8 percent a year in 2014 and 2015 with demand for transportation fuels being a main factor, a senior researcher at top Asian refiner Sinopec said.
"I'm definitely bullish with Sinopec coming out and predicting 400,000 barrels per day growth in China next year.
That's a solid growth number from China," said Schieldrop.
China has been the engine of global oil demand in the past decade, accounting for almost half of total growth. But demand growth hit a four-year low of 4.5 percent in 2012, and a slowing economy has again weighed on its consumption this year.
China overtook the United States in September as the world's biggest net oil importer, but crude oil imports dropped in October to a 13-month low.
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