Prices have rallied nearly 20 percent over the past six sessions, but they remain roughly 50 percent below their peak from the middle of last year.

No sustained recovery is expected in the near term amid rising global inventories and steady OPEC supply.

But further falls in the U.S. oil-rig count, concerns over dented output from Libya, a key Mediterranean oil producer, and stronger U.S. job figures boosted prices.

Nonfarm payrolls increased 257,000 last month, data released on Friday showed, while data for November and December was revised to show a whopping 147,000 more jobs were created than previously reported, bolstering economic confidence in the world's largest oil consumer.

"It's still a bull trend (this week), and you get additional support from falling rig counts and positive jobs data," said Bjarne Schieldrop, chief commodities analyst with SEB in Oslo.

The average number of U.S. rigs drilling for oil fell by 199 in January from December, following the largest weekly drop since 1987 last week, Baker Hughes said.

Benchmark Brent crude traded $1.40 higher at $57.97 per barrel by 1454 GMT (09:54 a.m. EST). The weekly increase was poised to be the highest since 2011.

U.S. crude for March delivery traded at $51.58 per barrel, up by $1.10, after trading more than $2 higher. The contract was on track to close with the highest weekly gain since at least 2013.

Fighting across Libya, where two governments and parliaments allied to rival armed groups are vying for control, highlighted the threat of a breakup in the country, imperiling the country's oil exports.

Schieldrop added that the balance in global supply and demand is "still out of reach," and the prices are likely to come back down.

Growing numbers of OPEC delegates say they expect no rapid recovery in oil prices.

And a strike at nine U.S. refineries accounting for 10 percent of U.S. capacity also headed into a sixth day after union leaders rejected the latest contract offer from lead negotiator Royal Dutch Shell Plc.

But the developments this week helped override worries over the global glut, as well as cuts to the official selling price to Asia from top OPEC producer Saudi Arabia to the lowest level in at least 12 years.

The cut highlights Middle Eastern producers' battle to gain market share in Asia, but increases to official Saudi selling prices to the United States and Europe left a mixed signal.

(Additional reporting by Jacob Gronholt-Pedersen in Singapore; Editing by David Evans and Susan Thomas)

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