NEW YORK: Oil prices edged up nearly 1pc on Friday, as strong US economic data boosted demand sentiment and as production losses in sanctions-hit Iran and Venezuela tightened the market.
Still, oil futures were headed for weekly declines on a jump in US crude inventories reported this week.
Brent crude oil futures climbed 55 cents, or 0.8pc, to $71.30 a barrel by 12:38 p.m. EDT (1638 GMT), but were set for their first weekly loss in five weeks.
US West Texas Intermediate (WTI) crude futures were up 45 cents, or 0.7pc, at $62.26 a barrel, while poised for their second straight weekly decline.
A US jobs report that showed growth surging in April and the unemployment rate dropping to a more than 49-year low of 3.6pc, increased the expectation that crude demand would stay strong, said Phil Flynn, senior analyst at Price Futures Group in Chicago.
"After the strong jobs report, the market is kind of putting that big build this week into perspective," Flynn said.
Equities rallied and the US dollar weakened following the report, which also supported oil futures.
Oil prices tend to follow moves in equities, and demand for the US dollar-linked commodity often increases when the greenback slips.
Gains in the oil market, however, were limited by a spike in US crude inventories reported this week and rising oil production, which hit a record 12.3 million barrels per day last week.
Exports of US crude broke through 3 million bpd in November for the first time and hit a record 3.6 million bpd earlier this year, according to data from the Energy Information Administration.
This week's US rig count, an indicator of future output, is due at 1 p.m.
US sanctions against Iran and Venezuela and supply cuts led by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, helped to tighten the market and support prices.
Production from Saudi Arabia could edge higher in June to meet domestic demand for power generation, though output will remain within its quota in the supply pact, sources familiar with the kingdom's policy said.
The world's top crude exporter is expected to produce about 10 million bpd in May, slightly higher than in April but still below its 10.3 million bpd quota under the OPEC-led deal, industry sources said.
Traders said that prices were put under pressure by Russia's pumping clean oil through the Druzhba pipeline towards western Europe again, after several countries halted imports last week because of contamination.
Poland, Hungary and the Czech Republic are offering their domestic refiners about 8 million barrels of oil from strategic reserves after supplies from the Druzhba pipeline were halted, industry sources said on Friday.