Oil prices rose on Friday, with US crude jumping more than 7% to its highest since March on signs that demand was picking up, with China reporting increased refinery runs and rounding out a week of bullish news on the supply front.

West Texas Intermediate (WTI) oil was up $2.02, or 7.4%, at $29.58 a barrel at 2:19 p.m. EST (18:19 GMT), after hitting a session peak of $29.92, its highest since mid-March. WTI soared 9% in the previous session.

Brent crude was up $1.45, or 4.6% at $32.58 a barrel. Brent rose nearly 7% on Thursday.

Both contracts were on track for a third consecutive week of gains. The second-month contract for US crude traded at a discount to the first month for the first time since late February, implying market tightness, said Bob Yawger, director of energy futures at Mizuho in New York.

Amid supply cuts by the Organization of the Petroleum Exporting Countries and other major producers aimed at reducing a glut, there also are signs of improving demand. Data showed China's daily crude oil use rebounded in April as refineries ramped up operations.

"Oil prices have been up significantly since yesterday thanks to a better assessment of the situation by the International Energy Agency (IEA)," Commerzbank said in a note.

The IEA expects global crude inventories to fall by about 5.5 million barrels per day (bpd) in the second half of this year.

It also expects oil demand this year to fall by 8.6 million bpd, which is a smaller decline - by 690,000 bpd - than it forecast last month. It expects non-OPEC supply to fall by 3.2 million bpd.

Barclays raised its forecasts for Brent and WTI by $5-$6 a barrel for 2020 and by $16 a barrel for 2021. It now sees Brent prices averaging $37 a barrel and WTI at $33 this year. For 2021, the bank expects Brent and WTI prices to average $53 and $50 per barrel, respectively.