Petrobras climbs in Brazil after oil discovery

LOS ANGELES (MarketWatch) � Brazilian stocks rose Friday, with a climb in shares of market heavyweight Petroleo Brasiliero SA cutting slightly into the benchmark�s decline for the holiday-shortened week.

The Ibovespa BR:BVSP �advanced 0.2% to 65,942.73, with preferred shares of Petroleo Brasileiro, or Petrobras, PBR � BR:PETR4 �up 2.3% after the state-run oil producer said it found light crude oil below the deep-water Santos Basin off the coast of Sao Paulo state.

Light crude, which has a lower density and viscosity than other types of oil, is more valuable to refiners because it produces a higher percentage of gasoline and diesel fuels.

The discovery pushed up the Petrobras�s year-to-date gain to 14%. It also came during the same session that saw crude-oil futures jump above $109 a barrel to hold nine-month highs. April crude �has gained on worries among investors about the potential for supply disruptions as Iran eyes a halt in oil exports to some European countries. Read about oil prices in Futures Movers.

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Also higher in Sao Paulo trading Friday were shares of most mining and steel stocks, including a 0.4% rise in Vale VALE � and a 1% advance in shares of steel producer Gerdau GGB �.

Trading in Brazil was closed Monday and Tuesday for the Carnival holiday. For the shortened week, the Ibovespa lost 0.4%.

Petrobras on Friday said the discovery at the new well, named Carioca Sela, was verified by samples from tests in reservoirs at a depth of roughly 5,250 meters, or about 17,220 feet. The discovery was made in block BM-S-9 in the pre-salt area of the Santos Basin. The basin is home to the large Tupi oil field.

Work and investments related to the Carioca Sela discovery will be made by a consortium led by Petrobras, BG Group UK:BG � and Repsol Sinopec Brasil, a venture between Spanish oil firm Repsol ES:REP �and Chinese oil company Sinopec SNP �HK:386 .

On Thursday, Petrobras said two fields holding light oil in the Bauna and Piracaba offshore fields were commercially viable. The fields are located in shallow waters of the Santos Basin.

The Merval equity index AR:MERV �in Argentina fell 2% to 2,762.61 on Friday. Trading was also closed on Monday and Tuesday for the Carnival holiday. The index slumped 1.3% for the shortened week.

Mexico�s IPC MX:IPC � shed 0.2% to 37,945.22 in the daily session. It edged up 0.1% for the week. Chile�s IPSA CL:IPSA �rose 0.4% to 4,512.17 on Friday, but logged a 0.7% weekly decline.