Oil prices jumped nearly $2 a barrel on Friday to notch their biggest weekly gain in a year, boosted by concerns over rising tensions in Egypt and better-than-expected U.S. economic data.
Prompt U.S. oil prices initially lagged gains but rallied later in the day, extending this week's abrupt gains in spreads on speculation that U.S. Midwest oil supplies are poised to tighten. The September versus October U.S. West Texas Intermediate spread rose 26 cents to close at a contract high of $1.31 a barrel.
Oil investors focused on signs of renewed geopolitical risk in Egypt. Fighting broke out in Cairo after the Muslim Brotherhood movement called for a "Friday of Rage" to protest the ouster of President Mohamed Morsi. News of protests near the Suez Canal added to the alarm for oil traders.
U.S. crude oil prices extended their string of 14-month highs. Front-month U.S. crude futures settled $1.98 per barrel higher, or 1.96 percent, at $103.22, after touching a high of $103.32. Trading volume was thin due to the Independence Day holiday on July 4.
U.S. oil gained 6.7 percent for the week, the largest weekly percentage gain since October 2011.
Brent crude oil for August delivery traded at a three-month high and ended $2.18 per barrel higher, or up 2.07 percent, at $107.72 after hitting a high of $107.88.
Brent gained more than 5 percent on the week and showed its highest weekly percentage rise since last June.
Oil prices vacillated earlier in the day after data showed that U.S. employers added 195,000 new jobs to their payrolls last month, more than expected.
The U.S. dollar index surged 1.5 percent while gold and copper fell nearly 3 percent after the data was seen drawing Federal Reserve closer to scaling back its massive monetary stimulus later this year, which would sap liquidity and drag on commodity prices.
But for oil markets, the potential upside from increased economic activity outweighed risks from the rising dollar and possible policy tightening, said Matt Smith, commodity analyst at Schneider Electric in Louisville, Kentucky.