Oil steady around $120 on Greek optimism, Iran tension

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Concerns about potential supply disruptions and optimism over Greece has made oil a star performer this week, with U.S. crude eyeing its biggest weekly gain since late December and Brent headed for its fourth consecutive weekly rise.

North Sea Brent slipped 6 cents to $120.05 by 1007 GMT. U.S. crude rose 39 cents to $102.70.

"Brent is reacting to a combination of things, including continued optimism over Greece, a weaker dollar and the market focusing on reduced exports from Iran to Europe," said Jonathan Barratt, chief executive of Barratt's Bulletin.

Iran's top oil customers in Europe are making substantial cuts in imports ahead of European Union sanctions, reducing flows to the continent in March by more than a third, industry sources said.

Growing optimism that Greece has finally done enough to secure a second bailout after it set out extra budget savings also boosted sentiment.

Euro zone finance ministers are due to meet on Monday, and expectations that they will sign off a bailout deal for Greece increased after a proposal was dropped to withhold part of the agreement until after Greek elections expected in April.

"The Europe financial meeting on Monday is going to be the key driver in oil prices," said Ken Hasegawa, a commodity derivatives manager with Newedge Brokerage in Tokyo.

Prices were also supported by more evidence of sustained recovery momentum in the U.S. economy. U.S. data on Thursday showed jobless claims falling to a near four-year low, solid growth in factory activity in the Mid-Atlantic area and a faster-than-expected rise in housing starts.

(Additional reporting by Jessica Jaganathan in Singapore, editing by William Hardy)

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