Oil prices rose over 1% on Friday as supply risks remained in focus despite the receding likelihood of a US military strike against Iran.
Brent crude was up 84 cents, or 1.3%, to $64.60 a barrel at 1413 GMT, on course for a fourth consecutive weekly gain. US West Texas Intermediate was up 80 cents, or 1.4%, to $59.99.
At those levels, Brent was on course for a 2% weekly gain and WTI for a 1.4% gain. Brent was up a little more than $1 at its intraday peak as investors continue to weigh the potential for supply outages should tensions in the Middle East escalate, Reuters reported.
"While geopolitical tensions in the Middle East have eased, they have not disappeared, and market participants remain concerned about potential supply disruptions," said UBS analyst Giovanni Staunovo.
Both benchmarks hit multi-month highs this week after protests flared up in Iran and US President Donald Trump signaled the potential for military strikes, but lost over 4% on Thursday as Trump said that Tehran's crackdown on the protesters was easing, allaying concerns of possible military action that could disrupt oil supplies.
"Above all, there are worries about a possible blockade of the Strait of Hormuz by Iran in the event of an escalation, through which around a quarter of seaborne oil supplies flow," Commerzbank analysts said in a note.
"Should there be signs of a sustained easing on this front, developments in Venezuela are likely to return to the spotlight, with oil that was recently sanctioned or blocked gradually flowing onto the world market."
Meanwhile, analysts expect higher supply this year, potentially creating a ceiling for the geopolitical risk premium on prices.
"Despite the steady drumbeat of geopolitical risks and macro speculation, the underlying balance still points to ample supply," said Phillip Nova analyst Priyanka Sachdeva.
"Unless we see a genuine revival in Chinese demand or a meaningful bottleneck in physical barrel flows, oil looks range-bound, with Brent broadly hovering between $57 and $67."
