Oil jumps as Iran raises new challenge to nuclear deal

Crude prices jumped Friday to finish a volatile week on a high note after Tehran raised new questions about the nuclear deal that would allow Iranian oil back into the market.

In London trade, Brent North Sea crude for delivery in May rose $1.30 to $57.87, adding more than $3 a barrel for the week.

On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for May rose 85 cents to finish at $51.64 a barrel, $2.35 above the week-earlier close.

Prices that had been driven lower the previous two sessions by more signs of oversupply in the United States rebounded after Iran's President Hassan Rouhani and Supreme Leader Ayatollah Ali Khamenei appeared to back away from the agreement made in negotiations a week ago over the country's nuclear program.

Rouhani said western sanctions on Iran, which have forced its crude exports down by half, would have to be lifted as soon as a deal is formally completed.

The United States though reiterated its view that sanctions will be eased "in a phased manner upon verification that Iran has met specific commitments under a finalised joint comprehensive plan of action."

"There is a crawling sense that the geopolitical risks overseas are rising," said oil market analyst Phil Flynn of Price Futures Group.

"The situation with Iran, with comments from the ayatollah yesterday about the framework for the deal, it really raises questions as to when a deal with Iran can be done."

Flynn noted that another fall in the North American rig count of Baker Hughes, which points to the level of exploration and development activity in the oilfield, served as a support to prices.