Oil prices trim gains on US GDP data

New York's main contract, West Texas Intermediate crude for delivery in March, added 19 cents to $99.89 a barrel.

Brent North Sea crude for March increased by 51 cents to $111.30 in London late afternoon deals.

US economic growth sped up to 2.8 per cent in the fourth quarter, the Commerce Department said Friday, lower than predicted as consumer spending did not rise as much as expected.

Forecasts on average for the government's first estimate for the quarter were for a pickup to a 3.2 per cent growth pace after the third quarter's tepid 1.8 per cent expansion.

"Crude oil prices have slipped back from their highs after US GDP numbers came in slightly lower than expected," said CMC Markets analyst Michael Hewson.

"They still look set to finish the week higher to post their first weekly gains since the beginning of January, underpinned by Iranian threats to stop exports to the European Union."

The oil market had scored moderate gains Thursday, benefiting from the Federal Reserve's extension of the timeframe of its ultra-loose monetary policy to bolster US growth. That also weighed heavily on the dollar.

The US central bank's policy-setting Federal Open Market Committee said Wednesday that its key interest rate would remain near zero through at least 2014, extending a prior timeframe of mid-2013.

A weaker US currency makes dollar-denominated crude cheaper for buyers holding other currencies, tending to boost demand.

Traders kept an eye on the tense situation between oil-producer Iran and the West over Tehran's suspected nuclear weapons programme, which has triggered tough sanctions from the US and Europe.

European Union foreign ministers have agreed a ban on Iranian oil imports and a phase-out of existing contracts up to July 1 to pressure Tehran to end its controversial nuclear programme.

They also froze the assets of the country's central bank while ensuring legitimate trade under strict conditions.

In a retaliatory move, Iran's parliament is expected to consider next week a bill to ban oil exports to Europe immediately before the embargo comes into force, according to media reports.

The Islamic republic, which is already under four rounds of United Nations sanctions, vehemently denies its nuclear programme masks an atomic weapons drive as the West alleges, and insists it is for civilian purposes only.

Iranian President Mahmoud Ahmadinejad eased tensions slightly late Thursday by declaring that Tehran was ready to sit down with world powers for talks on its nuclear drive, according to state media.