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Oil prices settled higher on Friday, up about 6% on a week-on-week basis, as worries about supply from the Middle East mounted and as reining outages tightened refined products markets.

Brent crude futures settled up 56 cents, or 0.7%, at $82.19 a barrel. U.S. West Texas Intermediate crude futures settled up 62 cents or 0.8%, at $76.84 a barrel.

Oil futures rose throughout the week, buoyed after Israeli Prime Minister Benjamin Netanyahu's rejection of a Hamas ceasefire proposal on Wednesday. This week's rise followed a 7% loss in the prior week.

"We believe that this type of week-to-week wide price swings will further characterize the crude markets through the rest of this month short of major bullish headlines out of the Mideast that could force adjustment in global oil balances," said Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois.

U.S. energy firms this week also added 4 oil and natural gas rigs to 623 this week, its highest since mid-December, energy services firm Baker Hughes said in its closely followed report.

U.S. domestic production returned this week to a record 13.3 million barrels per day level, according to the U.S. Energy Information Administration. Last month, frigid weather caused widespread shut-ins in oil producing regions.

Israeli forces on Friday continued deadly air strikes on the Gaza Strip. On Thursday, the bombing of the southern border city of Rafah helped boost oil prices by around 3%.

"With the words that, 'no part of the Gaza Strip would be immune from Israel's offensive', it was not hard for oil participants to conclude that without even a passing regard for peace, there was not enough conflict-premium priced in," said John Evans, an analyst at PVM.

Crude futures were also supported by strength in gasoline and diesel prices as significant U.S. refinery downtime, both planned and unplanned, tightened product markets.

Gasoline futures rose about 9% in the week to $2.34 per gallon while heating oil futures increased by 11% to $2.96 per gallon.

Ukraine launched drone attacks against two oil refineries in southern Russia on Friday, resulting in a fire at the Ilsky refinery. The Afipsky refinery, also in Krasnodar Krai, which borders Crimea on the Black Sea and Azov Sea coast, was the other facility in the attack.

Russia has been exporting more crude in February than planned under an OPEC+ deal, following a combination of drone attacks and technical outages at its refineries.

"Proof still needs to be provided that Russia is able to cut oil exports sufficiently even without weather-related constraints," Carsten Fritsch, an analyst at Commerzbank, said on Friday in reference to the country's OPEC+ cut quota.

On Thursday, the U.S. Treasury Department sanctioned another three entities based in the United Arab Emirates (UAE) and one tanker registered by Liberia for violating a cap placed on the price of Russian oil by a coalition of Western nations.