Crude prices tended to trade in volatility after closing the changing week flat, as the global supply-demand situation kept changing in different directions amid Iran tensions, weakening demand and the possible release of strategic reserves.

IRAN'S EXPORTS DECLINE

Iran still remained the focus of the markets. Since the beginning of the year, the Iranian nuclear issue has helped push crude prices about 15 percent higher.

New York crude benchmark closed at 106.87 dollars a barrel and Brent Crude settled at 125.13 dollars a barrel on Friday. "What is going on in Iran and the Middle East is adding a 20 to 30 dollar premium to oil prices," U.S. President Barack Obama said in an interview with the AAA auto club.

Investors thought the West's sanctions, beginning last year and mostly targeted at Iran's oil industry, had started to impact Iran's crude supplies.

European countries and Japan had reduced their oil imports from Iran. It was getting harder and harder for Iran to sell oil to other countries as the West tried all means to isolate Iranian banks from the international financial system.

After the U.S. froze the Iranian Central Bank's assets, an international banking services firm also cut its ties with Iran's banks this month.

According to estimates from industry consultant Petrologistics released Friday, Iran, the second largest OPEC oil exporter, would ship 300,000 barrels per day less this month, which accounts to 14 percent of its all exports. It was the first sizeable drop in Iranian oil exports this year.

The markets were seeing speculation about supply disruptions in Iran coming to reality. Analysts said that less exports from Iran meant less supplies in the market, making the available crude more expensive.

GLOBAL SLOWDOWN CONCERNS WEIGH

Crude prices tumbled last week as investors expected less demand in view of more recession signs from Europe and a continuing contraction of Chinese manufacturing. Fears of a global economic slowdown weighed on market sentiments.

Signs of recession in Europe piled up after data released Thursday. The euro zone PMI reading compiled by Markit fell to 48.7 in March from 49.3 in February, missing analysts' expectation of a moderate improvement. Factory activity in both France and Germany fell sharply, even beyond the most pessimistic economists' prediction.

Meanwhile, China weighed on the markets after HSBC's flash China manufacturing PMI for March slowed to a four-month low of 48.1. Raymond Carbone, a senior oil trader at the New York Mercantile Exchange, said that an economic slowdown in China, the world's second biggest oil consumer, would hurt demand expectations and be bearish on prices.

However, Carl Weinberg, chief economist of High Frequency Economics Ltd, showed faith in China's economy.

"What we expect to see (in April) is a rise in output indicators back up and beyond normal rates of growth," Weinberg said.

He saw no need to worry about China's economy as "consumer demand would pick up" and the first quarter GDP "should show a return to trend-like growth."