Brent crude oil futures fell towards $102.50 a barrel on Friday as the dollar gained following better-than-expected U.S. consumer data, which could strengthen the case for the U.S. Federal Reserve to reduce stimulus.
Fed governors earlier said the bank was in no rush to curtail its bond-buying programme, but investors have been interpreting positive data as signs the Fed policy could shift sooner rather than later.
The North Sea benchmark, however, was still on track for its third quarterly loss, the longest losing streak since 1997/98, on persistent worries about the state of the global economy and its impact on oil demand.
Brent crude oil futures were down 15 cents at $102.69 a barrel by 1415 GMT, after earlier hitting a session high of $103.44.
U.S. crude oil fell 11 cents to $96.95 a barrel.
Comments by Fed governors on Friday appeared to allay investors' concerns the policy change would derail growth and dampen oil demand in the world's top oil consumer.
"Non-farm payrolls next Friday will set the tone on whether QE3 (U.S. quantitative easing) will ease", anytime soon, Olivier Jakob, an analyst at consultancy Petromatrix in Switzerland. said.
The premium of Brent over U.S. oil futures was at $5.74 a barrel after narrowing earlier in the day to $5.50, its tightest since January 2011.
A widely watched gauge of U.S. consumer sentiment came in stronger than expected, boosting the U.S. dollar and put pressure on oil prices.
Over the weekend, investors will be keeping an eye on protests in Egypt. Cairo faces a showdown in the streets after President Mohamed Mursi failed, in an address to the nation, to satisfy the demands of opponents who want to force him from office.
Britain's Buzzard oilfield output is expected to stay at a reduced rate of around 170,000 barrels per day (bpd) for around five days, an industry source said on Thursday.
Loadings of Russian crude oil resumed on Friday following a dispute over tug boats at the major Primorsk port in the Baltic. The dispute was adding some upward pressure to levels as Russian Urals is the main sour grade feeding European refineries.