Brent crude rose above $61 a barrel on Friday amid geopolitical tensions in Libya and Iraq, while traders eyed US rig counts and the outcome of Iran nuclear talks for further trading cues.

Fighting has escalated in northeast Iraq where the Islamic State militants have lit up oil wells to deter Shi'ite militiamen and Iraqi soldiers from advancing. In Libya, worsening security conditions have led to the closure of 11 oilfields.

Brent rose 53 cents at $61.01 a barrel by 0504 GMT, but was on track for a weekly drop after an 18 per cent gain last month. US West Texas Intermediate crude was up 35 cents at $51.11 a barrel, set for a more than two per cent weekly rise.

Middle East supply worries widened Brent's premium to WTI by nearly a dollar to close to $10 on Thursday.

"Keeping an eye on production in that region, there are escalating tensions there that could push the spread back through that $13-$14," said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney. The spread was at its widest in more than a year at $13 on Monday.

Investors are also eyeing Iran nuclear talks, US rig counts and non-farm payrolls data for price direction.

Iran's foreign minister has suggested a 10-year moratorium on some aspects of the country's nuclear program might be acceptable to Tehran, though he declined to discuss the issue in detail. Any sign of a lasting agreement between Tehran and six world powers could result in a flood of Iranian crude returning to the market.

Positive non-farm payrolls data could strengthen the US dollar against major currencies if it supports the case for a rise in US interest rates in coming months, dragging on commodities priced in the greenback.

Baker Hughes will release on Friday a weekly survey on the number of US rigs drilling for oil, an indicator used by some investors to gauge if shale producers are cutting output after prices slumped.

"Given the higher production cost for shale oil, we view that the supply-demand matrix will adjust itself accordingly to eventually lift oil prices to at least the estimated production cost," analysts at Singapore bank OCBC said in a note.

They expect Brent and WTI to reach $80 and $75, respectively, with most of the gains occurring in the second-half of 2015. - Reuters