Oil rose about 3% to a five-week high on Friday, carried higher again by an OPEC+ decision this week to make its largest supply cut since 2020 despite concern about a possible recession and rising interest rates.
The cut from the Organization of Petroleum Exporting Countries and allies including Russia, known as OPEC+, comes ahead of a European Union embargo on Russian oil and will squeeze supply in an already tight market.
Brent crude was up $3.48, or 3.7%, to $97.90 a barrel. U.S. West Texas Intermediate, or WTI, crude gained $4.18, or 4.7%, to $92.63.
Oil kept rallying even as the dollar moved higher after data showing the U.S. economy was creating jobs at a strong pace gave the Federal Reserve a reason to continue hefty interest rate hikes. A strong dollar can pressure oil demand, making crude more expensive for other currency holders.
Both benchmarks were on track for their highest closes since Aug. 30, their fifth straight daily rise and second straight weekly gain, in technically overbought territory.
For the week, Brent was up about 10% and WTI up about 15%. Both would be the biggest weekly percentage gains since March.
U.S. heating oil futures jumped 18% this week, putting the heating oil crack spread - a measure of refining profit margins - on track for its highest close on record, according to Refinitiv data going back to December 2009.
The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, agreed this week to lower their output target by 2 million barrels per day.
"Among the key ramifications of OPEC's latest cut is a likely return of $100 oil," said Stephen Brennock of oil broker PVM.
UBS Global Wealth Management also projected Brent would "move above the $100 bbl mark over the coming quarters."
The OPEC+ cut from the comes ahead of a European Union embargo on Russian oil and will squeeze supply in an already tight market.
OPEC Secretary General Haitham al-Ghais said the output target cuts will leave OPEC+ with more supply to tap in the event of any crises.
On Thursday, U.S. President Joe Biden expressed disappointment over the OPEC+ plans. He and U.S. officials said Washington was looking at all possible alternatives to keep prices from rising.
"With Brent now firmly back in the $90-100 range, the group will likely be pleased with the outcome although substantial uncertainty remains over the economic outlook," said Craig Erlam of brokerage OANDA, referring to OPEC+.
In Europe, divisions between European Union leaders over capping gas prices and national rescue packages resurfaced, with Poland accusing Germany of "selfishness" in its response to a winter energy crunch caused by Russia's war in Ukraine.
Petrol stations in the Paris region and throughout France were having problems getting enough fuel supplies as strikes at four TotalEnergies SE refineries continue for a tenth day.