Oil hit its highest level for the year on Friday with Brent crude rising above $60 a barrel, as eurozone economic growth exceeded expectations and market bulls priced in another drop in the US oil rig count.

Bets that falling exploration budgets of energy firms' will mop up some of the excess oil in the market also fueled gains.

Many analysts and traders believe there is a global oversupply of nearly two million barrels per day in crude oil. They say little has changed fundamentally to explain the rally of the past two weeks.

Even so, oil prices have marched higher. Brent rose over 3 per cent in Friday's session, about 6 per cent on the week and nearly 16 per cent on the month. Gains heightened after its front-month contract switched on Thursday at a premium.

Brent had collapsed from a high above $115 a barrel in June to a near six-year low under $46 in late January, as fears of a global oil glut rattled the market.

"Naturally, when prices fall that much within that short a time, you're likely to have a severe rebound as well, though speculators are possibly adding more fuel on the way up now," said Phil Flynn, analyst at the Price Futures Group in Chicago.

Brent was up $2.22 at $61.50 a barrel at 10:48 a.m. ET (1548 GMT), having reached $61.77 earlier.

US crude rose $1.94 to $53.15, after a session high at $53.32.

Some traders attributed Friday's strength in oil to the unexpected acceleration in euro zone economic growth in the final quarter of 2014. The bloc's largest member, Germany, particularly grew at more than twice the expected rate.

Others said the market was possibly pricing in another weekly drop in the US oil rig count, ahead of industry data due later in the day. The rig count fell last week to a three-year low.

Still, the rally in oil has come amid record-high US crude inventories.

Walter Zimmerman, chief technical analyst at United-ICAP in Jersey City, New Jersey, said unless US crude rose above $58.72, its rebound from the January low of $43.58 "is doomed to be a minor bear market correction in a continuing long term down trend." – Reuters