Oil climbed above $61 to a seven-week high on Friday after top fuel consumer the United States reported an unexpected drop in gasoline stocks and Iran said it would show 'no weakness' over its nuclear program, Reuters reports.
Strength in energy is also part of a broader commodity rally, Petromatrix analyst Olivier Jakob noted, with corn, wheat, metals and sugar all on the march in recent days.
U.S. crude was up 16 cents at $61.11 a barrel at 1302 GMT. It earlier hit $61.52, the highest since January 2, taking gains for the week to $3.48 or six percent. Some analysts had said a close above $60.80 could presage further gains.
"The range on crude oil has now been broken and ... the positive momentum is back into oil and should attract further momentum investment," Jakob said.
London Brent crude was up 42 cents at $61.04.
Weekly U.S. data on Thursday showed a surprise 3.1 million barrels fall in gasoline stocks, unnerving investors ahead of the peak summer demand season. Nine tankers of European gasoline are already headed to the United States and more are likely to follow to take advantage of higher U.S. prices.
"Gasoline stocks drew for a second week, falling more than expected... U.S. gasoline demand continued to show surprising strength," said BNP Paribas in a research note.