LONDON: Brent crude oil edged back above $108 a barrel on Friday after posting its biggest daily percentage drop in six months in the previous session.
Expectations for a rise in Libyan supply and caution ahead of data on US stockpiles capped gains.
By 1115 GMT, Brent had risen 33 cents to $108.11, rebounding from a 2.7 percent drop on Thursday, the largest decline since late June. But the European benchmark was still set for its biggest weekly percentage drop in six months.
US crude fell 17 cents to $95.27 and was on track for its sharpest weekly percentage fall since September 2012. On Thursday, the contract posted its biggest daily drop since November 2012.
"There was a very sharp fall yesterday," said oil analyst Olivier Jakob of Petromatrix in Zug, Switzerland. "We're seeing a little bit of a rebound, but it's still a relatively small move."
Investors are watching production in Libya, which has dropped to less than 250,000 barrels per day (bpd) from 1.4 million bpd in July. Libya hopes to resume production at one of its largest oilfields, El Sharara in the west of the country, within three days after protesters agreed to suspend their two-month stoppage, officials said on Thursday.
An increase in oil exports from the OPEC member would boost supply and weigh on prices.
Petromatrix's Jakob said the prospect of an increase in Libyan oil exports was different to previous false starts because it was coming from the west of the country. "What has really failed to materialise so far has been a restart in the east, where you have autonomy groups that are controlling the ports," Jakob said.
"In the west, it's a different situation because it was a protest at the field, but the port is actually open. If they restart production it can really move to the market."
The market was also waiting to see whether official US weekly data, to be released at 1600 GMT on Friday, would show an increase in US crude stocks.
Data from industry group the American Petroleum Institute on Tuesday showed US stocks fell last week as imports dropped. But a report by industry group Genscape showed a 1 million barrel rise in stockpiles at Cushing, Oklahoma, the benchmark delivery point for US oil futures.
Analysts expected the data to show a fifth consecutive draw in nationwide crude inventories.
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