* Libya unrest supports crude prices
* Brent/WTI spread narrows on refinery news
* U.S. crude higher for third week
(Adds details, settlement prices)
By Jeanine Prezioso
NEW YORK May 10 Brent and U.S. crude oil ended
slightly down on Friday, after trading sharply lower for much of
the session, rebounding as the U.S. dollar weakened and on late
news reports that more oil would flow through BP Plc's
Whiting, Indiana, refinery.
Earlier in the day, the euro had dropped to a one-month low
against the dollar on expectations that the U.S. Federal Reserve
would cut back on it monetary easing program.
But the dollar weakened toward the end of the day. The U.S.
dollar index eased to 83.151 after reaching an earlier
high of 83.438.
Crude oil prices are denominated in U.S. dollars, and when
the value of the currency sinks, prices rise to offset the
"The dollar has given back a fairly decent portion of its
gains," said Brian LaRose, technical analyst with United-ICAP in
Brent crude oil settled 56 cents lower at $103.91
per barrel after trading as low as $101.56.
U.S. crude oil futures ended the day 35 cents lower
at $96.04 per barrel after trading more than $3 lower at $93.37.
This week marks the third weekly rise in U.S. crude oil
An IIR Energy report that said BP would begin crude flows
through its 240,000 barrel-per-day crude unit early next week at
its Whiting, Indiana, refinery, also supported the market.
The unit will funnel more crude oil out of Cushing,
Oklahoma, the delivery point for West Texas Intermediate and the
benchmark for the New York Mercantile Exchange crude oil futures
Market expectations that more crude oil will be funnelled to
U.S. coastal refineries as pipeline capacity and some rail
expansions take hold has boosted the price of U.S. crude,
narrowing the spread between global benchmark Brent and WTI.
U.S. Energy Information Administration data on Wednesday
showed that supplies at Cushing had been drawn down.
This prompted the spread between Brent and WTI CL-LCO1=R
to narrow to its smallest point in more than two years, settling
at $7.72. The spread narrowed on the BP news and settled at
$7.87 on Friday.
Goldman Sachs in a report said it expects the spread
to narrow further to as low as $5 in the third quarter as
several pipeline projects come online to allow more production
to reach U.S. Gulf Coast refineries.
Crude prices were also supported by reports of unrest in
Some traders began buying oil at the end of Friday's session
not wanting to get caught short on the weekend after reports of
bombs exploding outside two police stations in Libya's eastern
city of Benghazi, brokers said.
(Additional reporting by Peg Mackey in London and Robert
Gibbons in New York; editing by Gunna Dickson)