Oil prices rose more than 2 percent on Friday on support from the continuing tensions over Iran’s disputed nuclear program and the potential for supply disruptions in the region along with the weaker dollar. Crude futures posted marginal weekly losses, but were up on Friday after slumping the previous session on news the United States and Britain were preparing a release from strategic oil reserves later this year. The dollar slumped after a report on U.S. consumer prices, which investors viewed as reducing the likelihood of the Federal Reserve tightening monetary policy anytime soon. U.S. consumer prices rose the most in 10 months in February as the cost of gasoline spiked, but there was little sign that underlying inflation pressures were building. “The reasoning is that the Fed will not be as likely to pull back on stimulus or raise interest rates, so the dollar weakened and that pushed up oil, along with the uncertainty about Iran and the SPR,” said Phil Flynn, analyst at PFGBest Research in Chicago. U.S. gasoline and heating oil also rose sharply, tagging along as Brent crude moved higher and boosted by news that Enterprise Products Partners shut a U.S. Gulf Coast-to-Midwest refined products pipeline because of a valve leak. Brent May crude rose $3.21 to settle at $125.81 a barrel, surging above its 20-day and 10-day moving averages and reaching $126.10 ahead of the close. For the week, Brent fell a mere 17 cents. U.S. April crude rose $1.95 to settle at $107.06 a barrel, reaching $107.25 and also pushing above its 10-day and 20-day moving averages. For the week, U.S. crude dipped 34 cents. Brent’s premium to U.S. crude , now comparing May contracts, ended at $18.23 a barrel based on settlements. Trading volumes in both contracts were lackluster. Brent’s volume was 34 percent below its 30-day average, with U.S. crude 27 percent below its 30-day average, with less than two hours left for post-settlement trading. Oil briefly trimmed gains on news that Saudi Arabia is preparing to extend this year’s unexpected surge in oil sales to the United States. Contrary to expectations that the modest recent rise in Saudi Arabia’s output was bound for fast-growing Asian markets that also might need to replace barrels from Iran, preliminary data shows that shipments to the United States have without fanfare risen 25 percent to the highest level since mid-2008. U.S. CORE INFLATION EYED The Labor Department said the Consumer Price Index rose 0.4 percent in February and that gasoline accounted for more than 80 percent of the rise. But excluding the food and energy categories, inflation pressures were generally contained, with the core CPI edging up only 0.1 percent. Oil investors shrugged off a dip in U.S. consumer sentiment. Analysts attributed this to the survey’s director indicating that $4 a gallon gasoline did not have the “shock value” it had in previous fuel price surges. U.S. consumer sentiment dipped in early March as rising gasoline prices pushed Americans’ inflation expectations for the next year higher, the Thomson Reuters/University of Michigan’s preliminary reading on consumer sentiment showed. IRAN AND RESERVE RELEASES European Union diplomats are debating whether to exempt some insurers from a ban on dealing with Iranian oil shipments after Asian oil importers lobbied for exceptions to ensure oil deliveries, government and industry sources said on Friday. The diplomatic wrangling comes ahead of an EU foreign ministers meet on March 23 and an EU ban on importing Iranian oil slated for July. “Spare capacity is really very tight, and any natural disaster or problem in the Middle East could be a real problem,” said Rob Montefusco, an oil trader at Sucden Financial, highlighting supply stoppages in Syria, Sudan and elsewhere. “No one wants to go home short at the weekend,” he added. A group of Democratic lawmakers in the U.S. House of Representatives is urging President Barack Obama to aggressively use the threat of releasing oil from the strategic petroleum reserve (SPR) to rein in speculators the lawmakers believe are driving up oil prices. Money managers raised their net long U.S. crude futures and options positions in the week to March 13, the U.S. Commodity Futures Trading Commission said on Friday.