By Julia Payne
LONDON, June 28 (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 appeared to allay investors' concerns the central bank would soon ease its bond-buying stimulus programme, which could dampen oil demand in the world's top oil consumer.
Brent crude oil futures gained 45 cents to $103.27 a barrel by 0922 GMT, after hitting a session low of $102.44 earlier as investors sold off gains from the previous session.
U.S. crude oil rose 60 cents to $97.66 a barrel.
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 programme altogether by mid-2014, if the economy improves as expected.
'Next week will be a short week, due to the July 4 holiday in the U.S., but an important one. Non-farm payrolls next Friday will set the tone on whether QE3 (U.S. quantitative easing) will ease,' Olivier Jakob, analyst at consultancy Petromatrix in Switzerland said.
Over the weekend, investors will be eyeing the outcome of 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.
Brent was also supported by continued turmoil in Libya and other oil-producing regions, as well as a North Sea outage. 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.
TIGHTER CHINESE LIQUIDITY
The asset sell-off also 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.
(Additional reporting by Jessica Jaganathan Editing by Michael Perry and Jeff Coelho) Keywords: MARKETS OIL/
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