* Front-month US crude fell, nearby months rose
* Brent/US crude spread narrows as US April crude rises
* Middle East, North Africa turmoil keeps oil supported
* China bank reserves rate hike could curb oil demand
* Coming up: Weekend meeting of G20 financial leaders
(Adds details on Iran ships)
By Robert Gibbons
NEW YORK, Feb 18 (Reuters) - Oil prices slipped on Friday
in volatile pre-holiday trading, as front-months relinquished
early gains made on news Egypt will allow Iran to send navy
ships through the Suez Canal and intensifying unrest in the
region.
U.S. front-month March crude contract expires next Tuesday
after Monday's U.S. Presidents Day holiday and, along with
thinned pre-holiday trading volume, the proximity of the
contract expiration was blamed for some of the volatility.
"People are taking pre-weekend profits, after prices
moved all over the place. The news that Egypt is allowing
passage of the Iranian warships helped NYMEX crude to the
upside, but there (were) no other strong headlines after that,"
said Tom Knight, trader at Truman Arnold in Texarkana, Texas.
U.S. crude for March delivery <CLc1> fell 16 cents to
settle at $86.20 a barrel, off an $87.88 intraday peak. March
crude did manage a 62-cent gain for the week.
In contrast, U.S. April crude <CLc2> rose 87 cents, or 0.98
percent, to settle at $89.71 a barrel after jumping to a $90.96
peak.
All the U.S. crude futures contracts except front-month
March finished higher.
ICE Brent crude for April delivery <LCOc1> fell 7 cents to
settle at $102.52, but rose 1.07 percent for the week, a fourth
straight weekly rise. Wednesday's Brent intraday peak of
$104.52 was the highest since September 2008.
The gap between U.S. and Brent crude prices also seesawed
in the volatility. While U.S. front-month March crude and Brent
April contracts closed slightly lower, the U.S. April contract
posted a nearly 1 percent gain, narrowing the premium of its
Brent counterpart <CL-LCO1=R> after that spread hit a record
$16.51 the previous session.
Egypt granted permission to Iran to send navy ships through
the Suez Canal sent both U.S. and Brent crude higher after
prices already were being lifted by clashes between protesters
and government supporters in Libya, Bahrain and Yemen.
Iran sending navy ships through the canal prompted Israel's
foreign minister earlier this week to call the move
"provocative."
Tensions about Iran's navy moving through the canal into
the Mediterranean came as the Iranian government wrestled with
how to deal with opposition and protests inspired by events in
Egypt and Tunisia. []
(Graphics on Middle East: http://r.reuters.com/nym77r)
The Middle east turmoil helped oil recover from early
weakness caused by China's bank reserve requirement increase
that revived concerns about curbed oil demand growth.
[]
"They have been trying to curb liquidity for some time, so
little surprise and not as bad as a benchmark rate rise, but
still slightly weighing on sentiment," said Andrey Kryuchenkov
from VTB Capital.
The weak dollar index <.DXY> offered some support for oil
prices. A weak dollar usually lifts dollar-denominated oil
prices because it lowers the cost to consumers using other
currencies and also the value of currency paid to producers.
The euro gained broadly on heightened expectations the
European Central Bank will raise interest rates. []
Finance ministers and central bankers from the Group of 20
meet in Paris this weekend, with the global economy and
commodity price inflation prime issues. []
(Additional reporting by Gene Ramos in New York, Zaida Espana
and Ikuko Kurahone in London and Jennifer Tan in Singapore;
Editing by Lisa Shumaker)
