Oil rose to $119 a barrel, trimming its decline this week, as improved German sentiment countered nervousness about the eurozone debt crisis, while Iran supply worries continued to lend support.
German business sentiment rose for the sixth month in a row in April, a survey showed on Friday. Oil buyers are cutting purchases of Iranian crude in April, industry sources said this week, adding to signs Western sanctions are curbing its sales.
Brent crude gained $1.07 to $119.07 a barrel by 1350 GMT. It fell as low as $116.70, the lowest since 10 February, on Wednesday. Crude added $1.62 to $103.89 and was heading for a weekly gain.
"I think we've marked the bottom of this downward move," said Christopher Bellew, a broker at Jefferies Bache in London. Support for Brent is coming from "the impact of sanctions on Iran and probably, once refineries come out of turnaround, quite a tight supply situation," he said.
The North Sea crude market, which underpins Brent futures, has come under pressure this week as maintenance at refineries curbed demand. Brent's decline this week was earlier on Friday on track to be the steepest in absolute terms since mid-January.
The Munich-based Ifo think tank said on Friday its German business climate index, based on a monthly survey of some 7,000 companies, inched up to 109.9 in April from 109.8 in March, taking it to its highest level since July 2011.
A Spanish bond sale on Thursday had failed to ease concerns about the sustainability of the country's debt, while an employment report suggested a slowdown in job creation, dimming the outlook for oil demand.
Concern about possible supply shortages as Western sanctions target exports from Iran helped to send Brent to above $128 a barrel in March, the highest since 2008.
Helping to allay those concerns, top world exporter Saudi Arabia is pumping crude at the highest rate in decades and its Oil Minister, Ali al-Naimi, said on 13 April the kingdom was "determined" to see a lower oil price.
Talks between world powers and Iran over its nuclear program have also eased the pressure on prices. A second round of discussions is scheduled to take place in Baghdad on 23 May.
Crude remained supported on expectations that an oil glut in the Midwest would ease with an earlier-than-scheduled plan to reverse the flow of the Seaway crude pipeline.
Brent's premium to crude was trading below $15 on Friday, having weakened from almost $22 on 5 April.
