Oil prices rebounded on Friday as the threat of US air strikes on Iraq triggered fresh worries over supply disruptions in the crude-rich country.
US benchmark West Texas Intermediate (WTI) for delivery in September rose 79 cents to $98.13 a barrel.
Brent North Sea crude for September jumped $1.03 to stand at $106.47 in London midday deals.
Prices recovered at the end of a week during which crude futures have been pressured by a firmer dollar and solid supplies, according to traders.
WTI hit a six-month low point at $96.55 on Thursday. On Tuesday, Brent reached $104.07 -- the lowest level for four months.
US President Barack Obama has ordered his country's warplanes back into Iraqi skies to stop jihadists from moving into autonomous Kurdistan and carrying out a potential genocide against displaced minorities.
CMC Markets analyst Desmond Chua said the development could add "significant risk premium to oil prices" as dealers worry about potential supply disruptions.
"The announcement certainly edges up the geopolitical concerns about Iraq and the Middle East region, and comes as a bit of a surprise to investors," Chua told AFP.
Singapore-based Phillip Futures said fears about immediate disruptions "may be overplayed" as potential air strikes would target only northern Iraq, where oil fields are "relatively small and account for a small percentage of total output".
Islamic State insurgents now control large swathes of Iraq's north and west. The sweeping offensive began on June 9, preventing Baghdad from exporting oil via a pipeline to Turkey and by road to Jordan.
Iraq's oil ministry on July 24 said crude exports totalled 2.42 million barrels per day in June, falling far short of a budgeted projection of 3.4 million bpd.
As the number-two producer in the OPEC cartel, Iraq's 11 percent of proven world reserves plays a key role on world markets and prices after violence disrupted oil exports from Syria and Libya.