Oil settles above $62, posts gains for the week after sudden Friday spike

Key Points
  • West Texas Intermediate (WTI) oil futures settled 1.88 percent higher at $62.34 a barrel.
  • Oil suddenly spiked late Friday morning, hitting its highest since March 7.
  • Traders noted worries about rising Middle East tensions and possibly some short covering ahead of the weekend.
Oil pumpjacks in silhouette at sunset.

U.S. crude oil futures suddenly spiked more than 1 percent late Friday morning, erasing losses for the week, as tensions rose in the Middle East.

West Texas Intermediate (WTI) oil futures settled 1.88 percent higher at $62.34 a barrel, recouping weekly losses to post a gain of about half a percent for the week.

Earlier in the session, WTI hit a high of $62.54, its highest since March 7.

"Between $58 and $64, there's a lot of air in the market," said Gene McGillian, manager of market research at Tradition Energy. "I thought the original move in the market today was increased demand. It's pretty clear we have a tighter supply-demand picture."

McGillian said the abrupt move higher could be shorts covering ahead of the weekend, which involves traders buying back securities. "The shorts in the market have to be nervous that some kind of news comes out," he said.

A "60 Minutes" segment with Saudi Arabia's crown prince, Mohammed bin Salman, is set to air Sunday. In a portion of the interview published Thursday, the crown prince said his country would obtain a nuclear bomb if Iran developed its own.

Bin Salman is a "delusional and naïve person," Iranian Foreign Ministry spokesman Bahram Qassemi said Thursday in a statement published Friday on Iran's Ministry of Foreign Affairs website.

Commodities tomorrow: Crude higher on OPEC production decline

"The tensions are higher in the region than people realize, by a lot," said John Kilduff of Again Capital.

Britain, France and Germany have proposed fresh EU sanctions on Iran in an effort to persuade the White House to preserve the 2015 nuclear deal with Tehran, Reuters reported early Friday afternoon, citing a confidential document.

In the U.S., The Washington Post reported late Thursday that President Donald Trump has decided to remove White House national security advisor H.R. McMaster from his position. The White House has denied that any changes are coming to the National Security Council. But the report added to recent turmoil in the administration, notably the firing of Rex Tillerson as secretary of state and resignation of Gary Cohn as chief economic advisor.

Elevated political uncertainty could add up to traders being nervous about short oil positions into the weekend.

The weekly Baker Hughes rig count showed an increase of 4 oil rigs in the U.S. to 800.

— CNBC's Patti Domm contributed to this report.

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