By Jessica Jaganathan
SINGAPORE (Reuters) - Brent crude oil futures rose above $103 a barrel on Friday and are set for the first monthly rise in five months, after comments from Federal Reserve governors that the U.S. central bank is in no rush to curtail its massive bond-buying programme.
The North Sea benchmark, however, is still on track for a third quarterly loss - the longest such streak since 1997/98 - on persistent worries about the state of the global economy and its impact on oil demand.
The latest Fed comments appeased investors who had worried that the central bank would soon ease its unprecedented bond-buying stimulus programme, which could derail oil demand in the world's largest oil consumer.
Brent crude oil futures gained 18 cents to $103.00 a barrel by 0638 GMT, after hitting a session low of $102.44 earlier as investors sold off gains from the previous session.
U.S. crude oil rose 32 cents to $97.37 a barrel.
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Thursday's settlement price was higher mostly on the comments by the Fed governors, said Ken Hasegawa, a commodity sales manager at Newedge Japan.
"We will probably see some light profit-taking and short-covering today and I think the market will trade within a narrow range," said Hasegawa.
Continued turmoil in Libya and other oil-producing regions and a North Sea outage also lent support to Brent. Britain's Buzzard oilfield is expected to stay at reduced output of around 170,000 barrels per day (bpd) for around five days, an industry source said on Thursday.
Risk assets have been sold off since last week when Fed Chairman Ben Bernanke said the central bank expected to reduce its pace of bond buying later this year, and to end the program altogether by mid-2014, if the economy improves as expected.
That move comes amid concerns over tightening liquidity in China and a slowing economy which could impact oil demand in the world's second-largest oil consumer.
China's central bank is squeezing funds out of the money market, forcing banks to borrow money at historic interest rate levels, but the manoeuvre appears to have been calculated to have limited impact on the real economy.
"We may be seeing a little bit of positioning prior to China PMI data which is due on Monday as a recent slew of statistics from China point towards the fact that the risk is to the down side," said Ric Spooner, chief market analyst at CMC Markets.
Growth in China's factory sector may have stalled in June as domestic and external demand weakened, a Reuters poll showed, boding ill for broad economic prospects in the second half.
The median forecast of 12 economists polled by Reuters this week showed China's official Purchasing Managers' Index (PMI) likely touched 50 in June, from 50.8 in May.
Large stockpiles in the U.S. of crude oil and gasoline put a lid on oil price gains. (Editing by Michael Perry and Tom Hogue)