REUTERS, New York

Oil prices rose over 2 percent on Friday as the International Energy Agency said the market was tighter than it appears, while US tariffs and possible further sanctions on Russia were also in focus.

Brent crude futures settled up $1.72, or 2.5 percent, at $70.36 a barrel. US West Texas Intermediate crude gained $1.88, or 2.8 percent, to $68.45 a barrel. For the week, Brent rose 3 percent, while WTI had a weekly gain of around 2.2 percent.

The IEA said the global oil market may be tighter than it appears, with demand supported by peak summer refinery runs to meet travel and power generation.

Front-month September Brent contracts were trading at about a $1.20 premium to October futures.

“The market is starting to realize that supplies are tight,” said Phil Flynn, senior analyst with Price Futures Group.

US energy firms this week cut the number of oil and natural gas rigs operating for an 11th straight week, energy services firm Baker Hughes said. The last time that happened was July 2020, when the COVID-19 pandemic cut demand for fuel.

Short-term market tightness notwithstanding, the IEA boosted its forecast for supply growth this year, while trimming its outlook for growth in demand, implying a market in surplus.

“Opec+ will quickly and significantly turn up the oil tap. There is a threat of significant oversupply. In the short term, however, oil prices remain supported,” Commerzbank analysts said. Opec+ is the Organization of the Petroleum Exporting Countries plus allies including Russia.

Further adding support to the short-term price outlook, Russian Deputy Prime Minister Alexander Novak said Russia will compensate for overproduction against its Opec+ quota this year in the August-September period.