U.S. West Texas Intermediate (WTI) crude futures were at $65.34 a barrel, up $1.04, or 1.6 percent.
Brent crude futures hit a session high of $70.22 a barrel before retreating to $70.13 by 10:27 a.m. EDT (1427 GMT), up $1.22 or 1.77 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 CLc1 were at $65.34 a barrel, up $1.04, or 1.6 percent. On the week, WTI was up about 4.4 percent.
“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. Gold XAU=, seen as a safe haven, hit a two-week high.
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.
“As the Saudi guessing game for the new rebalancing target begins, Brent seems well positioned to have another crack at the $70 (a barrel) level,” PVM said in a note.
Although analysts said the stand-off between the United States and China could hit oil markets, for now most said demand looked healthy.
“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.
Morgan Stanley also 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,” the U.S. bank said.
“There are sufficient reasons to expect oil prices to strengthen further from here, and we stick with our (Brent) $75 per barrel call for Q3,” Morgan Stanley said.
Goldman Sachs said in a note this week that demand and OPEC cuts pushed its Brent spot price expectations to $82.50 a barrel by mid-year.