U.S. crude oil futures ended higher on Friday for the third week in row, after climbing to a 5-week high above $60 as Nigeria curbed exports to comply with OPEC production cuts.
But the day's gains shrunk near the close on news that Iran's chief nuclear negotiator, Ali Larijani, will attend a security conference in Germany on Saturday, traders said.
Earlier in the day, the Iranian official was reported to have cancelled his visit to Munich due to illness.
The market's keen interest in this development highlighted concerns over tensions surrounding Iran's nuclear goals, traders said.
Frigid temperatures in much of the United States underpinned market strength, helping spur further short-covering ahead of the weekend, they added.
"There has been short-covering ahead of the weekend, with cold forecasts still there ... the market mentality has changed, from being bearish to a more balanced, bullish outlook," said Kyle Cooper, director for research at IAF Advisors in Houston.
On the New York Mercantile Exchange, March crude settled 18 cents, or 0.3%, higher at $59.89 a barrel. It hit an intraday high of $60.80, taking out resistance at $60.70 and marking the highest level since prices hit $60.97 on Jan. 3. It fell as low as $59.30 earlier.
Crude prices have risen nearly $11, or 22%, since tumbling on Jan. 18 to $49.90, the lowest price since May 2005. But they are down more than $18, or 24 percent, from the record $78.40 hit in July.
Nigeria, whose crude oil is valued by U.S. refineries for its gasoline-making qualities, has declared force majeure on some of its crude shipments for February and March as it rescheduled liftings to reflect lower export volume.
About seven cargoes in February and 11 in March would be affected by the declaration, a crude oil trader said.
These figures closely correspond with state-owned oil firm Nigerian National Petroleum Corp.'s decision on Tuesday to reallocate 250,000 barrels per day in February and 300,000 bpd in March.
Geopolitical tensions continued to be cited by market sources, especially Iran's dispute over nuclear development with Europe and the United Nations and its recent war games and missile tests.
On Thursday, Iran's Supreme Ayatollah Ali Khamenei said the Islamic Republic would target U.S. interests worldwide if it came under attack over its nuclear program.
The current cold wave in the United States was expected to lift heating fuel demand almost 20 percent above normal this week, the National Weather Service projected in its weekly report on Monday.
In the Northeast, heating demand will average above normal during the next five days, private forecaster DTN Meteorlogix predicted Friday. The six-to-10-day Meteorlogix forecast called for temperatures to average below to well below normal.
NYMEX March heating oil settled little changed at $1.7251, up 0.01 cent, after surging to $1.742, the highest since Dec. 20's $1.7515. The day's low was $1.71. Resistance was charted at $1.75, with support at $1.65.
NYMEX March RBOB rose 2.15 cents, or 1.4%, to $1.6148 a gallon. It peaked for the day at $1.6325, the highest since Dec. 26's $1.641. Resistance was at $1.63 and support was at $1.50.
Crude prices also rose on Thursday, helped by news Occidental Petroleum had declared force majeure on oil and gas supplies from its Elk Hills, California, field.
The field produces 120,000 bpd of oil equivalent. Late on Friday, Occidental said it expects to resume production within a few days.