* U.S. crude back above 100-day, 200-day averages
* Obama warns of further sanctions against Russia
* Oil prices post first weekly gain in four weeks
(Updates prices to settlement, adds CFTC data)
By Anna Louie Sussman
NEW YORK, July 18 Oil prices eased in thin trade
on Friday but notched their first weekly gain in a month due to
heightened geopolitical risk after the downing of a Malaysian
jetliner over eastern Ukraine and as Israeli ground troops
advanced into Gaza.
The crash of the Malaysian plane came a day after the United
States imposed sanctions on Russia's biggest firms after what
Washington saw as Moscow's failure to curb violence in Ukraine,
pushing oil prices up nearly 2 percent on Thursday.
Brent fell 65 cents to settle at $107.24 a barrel,
reversing the previous day's gains. U.S. crude slipped 6
cents to $103.13, after hitting a session high of $103.94 and
closing $1.99 higher on Thursday, a surge that partly reversed
three weeks of losses.
The rally stalled on Friday as investors cashed in from the
biggest daily move in over a month.
"Going into the weekend, people want to take some money off
the table now," said Joseph Posillico, senior vice president of
energy derivatives at Jefferies Bache in New York.
U.S. crude was back above its 100-day and 200-day moving
averages after pushing below the 100-day last week and below the
200-day on Tuesday. The drop below the 200-day was the first
time since April.
"It seemed that people really aren't going to be jumping to
conclusions after the airliner was shot down, and things haven't
really escalated yet," said Gene McGillian, analyst at Tradition
Energy in Stamford, Connecticut.
Russia is one of the world's top producers and exporters of
oil and gas. Any restriction on the supply of Russian fuel to
the West was seen as likely to support oil prices.
Washington imposed sanctions this week on several Russian
companies including Rosneft, Russia's top oil
producer. U.S. President Barack Obama warned
Russian President Vladimir Putin on Thursday of additional
sanctions if Moscow did not change course on Ukraine.
Escalating tension in the Middle East ratcheted up the
global risk premium as Israel intensified its ground offensive
Investors worried that a general conflagration could draw in
neighbouring countries and affect oil supplies.
Alternatively, a cooling of tensions over the weekend could
shift the focus back to oil market fundamentals.
"Brent seems to still have some supply and demand issues
with overhangs in West African crude," said Posillico.
Hedge funds and large money managers cut their net long U.S.
crude futures and options positions in the week to July 15, the
U.S. Commodity Futures Trading Commission said on Friday.
The speculator group cut its combined futures and options
positions in New York and London by 56,323 contracts to 294,735
in the week through July 15.
(Additional reporting by Lorenzo Ligato in New York, Rowena
Caine and Christopher Johnson in London, Keith Wallis in
Singapore; Editing by Jeffrey Benkoe, Marguerita Choy and Lisa