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Oil up as Brexit fears ease, still down for week

A pump jack is seen at sunrise near Bakersfield, California October 14, 2014. REUTERS/Lucy Nicholson

NEW YORK - Oil prices rose on Friday for the first time in a week as the dollar fell and investors in global markets cautiously bought some riskier assets as anxiety eased about Britain's possible exit from the European Union.

Crude futures remained on track for a weekly loss after daily declines from Monday through Thursday.

Brent crude futures' front-month contract was up $1.56, or 3.3 percent, at $48.75 a barrel by 1:53 p.m. EDT.

The front-month in U.S. crude's West Texas Intermediate (WTI) futures rose $1.35, or 3 percent, to $47.56.

For the week, both Brent and WTI were down about 3 percent each.

The two crude benchmarks pared gains briefly in Friday's afternoon trade after oil services firm Baker Hughes reported that U.S. energy firms added oil rigs for a third week in a row. 

In Thursday's session, Brent and WTI lost about 4 percent each as investors fretted that the global economy could be thrown into turmoil if the UK votes next week to ditch its EU membership.

On Friday, Britain mourned the death of UK member of parliament Jo Cox, a day after the vocal advocate for Britain remaining in the union was murdered. Her death threw next week's referendum on EU membership into limbo.

The dollar fell nearly half a percent, retreating from its two-week high on Thursday that had weighed on demand for greenback-denominated oil from the holders of the euro and other currencies. 

Some analysts cautioned that with the UK's future in the EU still unknown until a vote next Thursday, oil could come under pressure again.

"It's mainly Brexit at the moment, at least until next Thursday, before people start to look at the more fundamental oil/commodity drivers again," ABN Amro's senior energy economist Hans van Cleef said.

Julian Jessop, chief economist and head of commodities research at Capital Economics, told Reuters Global Oil Forum that a Brexit situation could lead to a sharp oil selloff sending Brent to as low as $40.

In industry news, global oil majors Chevron and Royal Dutch Shell were putting up small refineries for auction as they looked to trim lower-margin assets amid rising crude prices.