Crude prices on Friday hit their highest level since late January after the Saudi energy minister said OPEC and allied producers would need to keep coordinating supply cuts into 2019, and as concerns grew over the future of Iranian crude exports.
Brent crude futures hit a session high of $70.22 a barrel before retreating to $69.90 by 1:25 p.m. EDT (1725 GMT), up 99 cents, or 1.4 percent. For the week, Brent was up about 5.9 percent, its strongest weekly rise since July.
U.S. West Texas Intermediate (WTI) crude futures were at $65.36 a barrel, up $1.06, or 1.7 percent. On the week, WTI was up about 4.9 percent, its biggest weekly gain since September.
"There are a number of bullish things to hang the hat of the rally on this week; be it the inventory report ... or the tariff news, or the heightened tensions between Saudi and Iran," said Matt Smith, director of commodity research at Clipper Data in Louisville, Kentucky.
President Donald Trump`s decision to replace national security adviser H.R. McMaster with John Bolton, who is seen as more hawkish on Iran, also supported prices, Smith said.
Oil`s rise defied a slump in global stock markets, which fell in response to worries about a trade stand-off between the United States and China. Though analysts said the stand-off could hit oil markets, most said for now, other bullish factors outweighed it.
U.S. energy companies added four oil rigs in the week to March 23 according to a report from General Electric Co`s Baker Hughes energy services firm. Though that brought the total number of rigs to 804, the highest since March 2015, prices were little affected by the data due to other bullish factors.
Since January 2017, the Organization of the Petroleum Exporting Countries as well as a group of non-members have curbed output by 1.8 million barrels per day.
Saudi Energy Minister Khalid al-Falih told Reuters that such curbs would need to continue into 2019 to reduce global oil inventories.
"Geopolitical tensions are coming to the front. But global balances are relatively tight at the moment. That`s enough to amplify relatively small factors," said Andrew Wilson, head of energy research at BRS Brokers.
The demand outlook has also been supportive to oil prices.
"We`re continuing to see signs that demand is really healthy; total U.S. demand is more than 1 million barrels a day more than it was a year ago," said Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut.
"As the fundamental picture continues to tighten, that`s going to attract further length in the market," he said.
Morgan Stanley cited an expected pick-up in seasonal demand in the coming months.
"We are only three-four weeks away from peak refinery maintenance, after which crude and product demand should accelerate ... Global inventories are already at the bottom end of the five-year range," Morgan Stanley said.
Morgan Stanley also said that they expect Brent prices to hit $75 a barrel in the third quarter.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)