Brent was steady above $123 a barrel on Friday, as the possibility of supply disruptions put a floor under a market that fell sharply in the previous session on weak manufacturing activity in China.
The potential loss of Iranian crude supplies amid tightening Western sanctions and news that the International Energy Agency (IEA) was not planning to release reserves from strategic storage as of now also supported oil markets.
"The Iran situation has a long way to run and that will keep the market tight and support crude oil," said Tony Nunan, a risk manager with Mitsubishi Corp in Tokyo. "The market had fallen enough yesterday and trading will be locked in a range for now."
Brent crude edged up 1 cent to $123.15 a barrel by 0622 GMT. The benchmark is set to fall more than 2 percent this week, after ending flat in the previous week.
U.S. crude was up 15 cents at $105.50, and is poised for a 1.4 percent fall this week, its second straight weekly decline.
But weak manufacturing data from the euro zone and top energy consumer China kept a lid on gains.
Brent could trade between $115-$125 a barrel in the short-term, as the threat of supply disruptions is offset by seasonally low demand for oil in the second quarter, Nunan said.