Oil prices rose on Friday, making the largest weekly gain since July, supported by concerns about the possibility of Western military action in Syria and reports of dwindling global oil inventories.

The prospect of military action in Syria that could lead to confrontation with Russia hung over the Middle East but there was no sign a US-led attack was imminent.

Traders sought to lock in long crude oil positions ahead of the weekend, said John Kilduff, Partner at hedge fund Again Capital Management.

‘The geopolitical jitters just keep getting priced in here more and more, as we get closer to the moment of the strikes, if there are any,’ Kilduff said, noting Syria posed a risk to global stability because of its relationship with other powerful oil producers.

‘Syria is a client state of both Russia and Iran and the risk for escalation is quite high and I think that is what the market is worried about.’

Brent crude recovered from losses early in the session and settled up 56 cents at $US72.58 a barrel, with a $US5.48 weekly gain, or eight per cent.

US West Texas Intermediate (WTI) crude futures rose 32 cents to $US67.39 a barrel, up eight per cent for the week.

Hedge funds and money managers cut their bullish wagers on US crude for the second week in a row in the week to April 10, data showed on Friday. The move came even as prices rose, according to data released by the CFTC.

On Wednesday this week, both oil benchmarks hit their highest since late 2014 after US President Donald Trump warned missiles ‘will be coming’ in response to a suspected gas attack in Syria and after Saudi Arabia said it intercepted missiles over Riyadh.

On Thursday, Trump tweeted that an attack on Syria ‘could be very soon or not so soon at all.’

‘The Syrian escalation risk cannot be fully written off, but we view that it deserves less of a premium than three days ago,’ Petromatrix said in a note.

A surplus in global oil inventories is also close to evaporating, OPEC said on Thursday, adding its collective output fell to 31.96 million barrels per day (bpd) in March, down 201,000 bpd from February.

Vienna-based OPEC and its oil producer allies are expected to extend their supply reduction pact into 2019 even though the global glut of crude looks set to be eradicated by September, OPEC Secretary-General Mohammad Barkindo told Reuters.

The International Energy Agency (IEA), which coordinates the energy policies of industrialised nations, signaled on Friday that markets could become too tight if supply remains restrained.

‘It is not for us to declare on behalf of the Vienna agreement countries that it is ‘mission accomplished’, but if our outlook is accurate, it certainly looks very much like it,’ the IEA said.

Meanwhile, China’s March crude oil imports climbed to the second-highest level on record.

US drillers added seven oil rigs in the week to April 13, bringing the total count to 815, the highest since March 2015, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday.