Oil futures strengthened Friday after a top energy watchdog raised its forecast for 2014 oil demand due to improved economic growth.
Light, sweet crude for April delivery rose 83 cents, or 0.9%, to $99.03 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe rose 18 cents, or 0.2%, at $107.57 a barrel.
The Paris-based International Energy Agency, which represents some of the world's largest oil consumers, raised its forecast for demand growth this year by 100,000 barrels a day to 1.4 million barrels a day on expectations of a more robust economic backdrop.
On Wednesday, the Organization of the Petroleum Exporting Countries made a similar move, upgrading its forecast for demand growth for the second month in a row to 1.14 million barrels a day. The U.S. Energy Information Administration said Tuesday that it expects global demand to grow 1.2 million barrels a day this year.
But the IEA also said rising supplies, due to surging production in the U.S., Canada and Iraq, is offsetting the high demand.
"While international tensions may be on the rise, pressure on oil markets...seems set to ease," the IEA said in its monthly report.
Market participants are closely watching U.S. Secretary of State John Kerry's meeting Friday with Russian Foreign Minister Sergei Lavrov about rising tensions between Russia and Ukraine. A referendum on whether Crimea will secede from Ukraine and become part of Russia is scheduled for Sunday. If the vote goes ahead, Europe could impose sanctions on Russia.
"If no progress is made at today's meeting, I would expect oil to end the week with a modest...rally," said Dominick Chirichella, analyst at Energy Management Institute.
Front-month April reformulated gasoline blendstock, or RBOB, recently traded up 0.07 cent to $2.9336 a gallon. April diesel rose 1.23 cents, or 0.4%, to $2.9319 a gallon.
--Sarah Kent and Nicholas Winning contributed to this article.
