* February Brent nears expiry, March contract priced lower
* Technicals show U.S. crude to fall to $89 []
* Coming Up: U.S. retail sales, industrial output; 1330,
1415 GMT
(Updates prices)
By Alejandro Barbajosa
SINGAPORE, Jan 14 (Reuters) - Brent crude steadied above
$98 on Friday after this week approaching triple-digit figures
for the first time in more than two years, outpacing U.S.
benchmark prices, which were dragged down by an increase in
the country's jobless claims.
Brent crude for February <LCOc1>, which expires at the end
of trading on Friday, rose 20 cents to $98.26 a barrel at 0739
GMT, while the March contract <LCOc2>, which will become the
front month on Monday, was trading at $97.45.
On a weekly basis, Brent has gained more than 4 percent,
reaching a 27-month high of $98.85 on Wednesday, while U.S.
marker West Texas Intermediate (WTI) <CLcl> has risen by less
than 3 percent. It fell 37 cents to $91.03 on Friday, more
than $7 below Brent, the widest discount since February 2009.
A series of production snags from Norway to Alaska has
reinforced the view that a tightening of global oil markets
will benefit waterborne Brent crude over WTI, a grade
delivered at the landlocked storage hub of Cushing, Oklahoma.
Alaska's main oil pipeline will shut from Friday evening
to install a bypass aimed at restoring oil shipments to full
volumes after the line was shut following a leak last week.
"Oil prices have lost some momentum," as Brent approached
$100, said Credit Suisse analysts including Stefan Graber.
"Given prospects for a full resumption of the Trans Alaska
Pipeline next week, we have doubts that Brent can break above
this important psychological barrier."
The pipeline shutdown had raised expectations that
refiners on the U.S. west coast would increase crude imports
from the Asia-Pacific region and the Middle East.
Crude flow was 320,000 barrels per day (bpd) on Thursday,
about half of normal levels, after operator Alyeska partially
resumed shipments this week. The rate fell from a previous
400,000 bpd on Wednesday, as the pipeline drew less oil from
storage tanks along its trajectory. []
"While there have been numerous supply disruptions in the
past week ... we see these as part of the "noise" that is
always seen in the supply system," JP Morgan analysts led by
Lawrence Eagles said in a weekly note.
The prospect of additional supplies from the Organization
of the Petroleum Exporting Countries also tempered prices.
A delegate from a Gulf OPEC member state said OPEC will
only hold an emergency meeting if oil bursts into triple
digits and stays there, although the group's Gulf members
could informally add supply if needed. []
U.S. weekly initial unemployment benefit claims showed
their biggest increase in six months, suggesting that, even
with recent signs of economic improvement, the labor market
paints a gloomy picture for demand. []
The data helped drag down stock markets, even as Federal
Reserve Chairman Ben Bernanke said he was hopeful about the
recent improvement in the outlook, saying he now expects the
economy to expand between 3 percent and 4 percent this year.
The prospect of oil breaking $100 a barrel, last touched
in October 2008 after Lehman Brothers collapsed, has set off
alarm bells about the impact of fuel costs on the economic
recovery.
Top exporter Saudi Arabia has said it favours an oil price
between $70 and $80 a barrel, but Libya's top oil official on
Thursday said oil prices at $100 a barrel would not harm the
world economy and there was no need for OPEC to hold an
emergency meeting or add supplies. []
Brent crude last traded above $100 a barrel on Oct. 1,
2008, the only year in which any front-month oil futures
benchmark has surpassed that level.
Brent first touched $100 on Feb. 26, 2008, almost two
months after benchmark U.S. crude West Texas Intermediate
(WTI) futures first touched that level on Jan. 2, 2008.
(Editing by Clarence Fernandez)
