Oil prices rose more than two per cent on Friday on support from the continuing tensions over Iran's disputed nuclear programme and the potential for supply disruptions in the region along with the weaker dollar.
Crude futures posted marginal weekly losses, but were up on Friday after slumping the previous session on news the United States and Britain were preparing a release from strategic oil reserves this year. The US later denied the report.
The dollar slumped after a report on US consumer prices, which investors viewed as reducing the likelihood of the Federal Reserve tightening monetary policy anytime soon. US consumer prices rose the most in ten months in February as the cost of gasoline spiked, but there was little sign underlying inflation pressures were building.
"The reasoning is that the Fed will not be as likely to pull back on stimulus or raise interest rates, so the dollar weakened and that pushed up oil, along with the uncertainty about Iran and the SPR [Strategic Petroleum Reserve]," said Phil Flynn, analyst at PFGBest Research.
US gasoline and heating oil also rose sharply, tagging along as Brent crude moved higher and boosted by news that Enterprise Products Partners shut a US Gulf Coast-to-Midwest refined products pipeline because of a valve leak. Brent May crude rose $3.21 (Dh11.7) to settle at $125.81 a barrel, surging above its 20-day and 10-day moving averages and reaching $126.10 ahead of the close. For the week, Brent fell a mere 17 cents.
US April crude rose $1.95 to settle at $107.06 a barrel, reaching $107.25 and also pushing above its 10-day and 20-day moving averages. For the week, US crude dipped 34 cents.
Brent's premium to US crude now comparing May contracts, ended at $18.23 a barrel based on settlements.
Trading volumes in both contracts were lacklustre. Brent's volume was 34 per cent below its 30-day average, with US crude 27 per cent below its 30-day average, with less than two hours left for post-settlement trading.
Oil briefly trimmed gains on news Saudi Arabia is preparing to extend this year's unexpected surge in oil sales to the United States.