Oil edges up on book squaring, but posts big weekly drop

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Brent oil prices crept higher on Friday, as traders exited short positions ahead of a long holiday weekend in the United States, but the weekly percentage drop was still the biggest in more than a month.

Both Brent and U.S. crude ended the week 2 percent lower, as investors sold due to high supplies of U.S. crude oil, fears of an economic slowdown in China, the world's No. 2 oil consumer, and worries that the Federal Reserve will stop its bond buying program. It was the biggest weekly percentage loss since the week to April 19.

Brent crude oil futures settled 20 cents higher at $102.64 per barrel, after trading between $101.65 and $102.79.

U.S. crude oil futures settled down 10 cents at $94.15 per barrel, but above the 100-day moving average, after trading as low as $93.04.

Prices were supported late afternoon by a report of a gasoline unit shutdown at a refinery, and as traders bought contracts to cover short positions ahead of the Memorial Day holiday on Monday.

Genscape said it detected the shutdown of the 70,000 barrel per day fluid catalytic cracker at Irving Oil's 300,000 bpd refinery in St. John's, Canada.

Gasoline futures rose on the news, settling at $2.839 a gallon, after trading as low as $2.80.

"Initially, we thought it (the rise in prices) was just a shakeup north of border," said one New York-based broker. "But now, we're seeing short covering in front of the weekend."

U.S. equities also lent some support to oil prices late in the day as U.S. stock indexes came off their lows. (Reporting by Jeanine Prezioso in New York, Peg Mackey in London; Additional reporting by Florence Tan in Singapore and Robert Gibbons in New York; Editing by Marguerita Choy and David Gregorio)



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