Brent and U.S. crude futures jumped more than $1 a barrel on Friday on news that Ukraine forces engaged a Russian armored column on Ukrainian soil.
Ukrainian artillery destroyed a "significant" part of a Russian armoured column that crossed into Ukraine during the night, President Petro Poroshenko told British Prime Minister David Cameron, according to the presidential website.
Russia, a major oil and natural gas producer, denied its forces crossed into Ukraine and accused Kiev of trying to sabotage deliveries of humanitarian aid.
Ahead of the rally, Brent and U.S. crude futures had posted modest gains attempting to stabilize after signs of faltering economic growth and ample global crude supply sent Brent to a 13-month low on Thursday and U.S. crude to its lowest price since January.
Front-month October Brent crude was up more than $1 above $103 a barrel, having reached levels near $104. The September Brent contract expired on Thursday and fell $2.27 to go off the board at $102.01, the lowest settlement for front-month prices since June 2013. Brent's premium to the U.S. contract <CL-LCO1=R> increased to $8.82 a barrel intraday on Friday, the widest spread since June.
U.S. crude gained $1.77 to settle at $97.35 a barrel.
Brent and U.S. crude remained on pace to post weekly losses, with U.S. crude off nearly 1 percent and set to fall for the fourth straight week. Oil prices were pressured this week by news of OPEC crude production at a five-month high and Libya's increasing exports and reopened ports.
Robust U.S. production and government data showing an increase in the nation's commercial oil inventories also weighed on crude prices this week.