Oil futures jumped more than 2% during Friday's session as signs of supply tightness sent prices higher.

West Texas Intermediate (CL=F) was trading above $80 per barrel at levels not seen since November of last year.

Brent (BZ=F) futures also rose to trade above $83 per barrel. Friday's jump follows two consecutive months of gains.

Near-term contracts are currently trading at a premium compared to later months, a market condition called "backwardation" that signals crude supply tightness.

Greater-than-expected demand out of Asia coupled with expectations that oil alliance OPEC+ will extend its output reductions past March has helped lift contract prices.

"I think the rally in crude oil prices is on the expectation that OPEC+ will continue with their voluntary production cuts well into the second quarter of 2024," Andy Lipow of Lipow Oil Associates told Yahoo Finance on Friday.

"In addition, new refineries in Kuwait and Oman have taken crude oil off the market and refiners in Asia and elsewhere need to look for alternative supplies," he added.

Traders have also been reacting to continuing Middle East tensions. On Thursday President Biden said reports of Israel firing on people waiting for food in Gaza would complicate talks of a ceasefire between Israel and Hamas.

Over the past two months the crude markets have priced in cargo and tanker reroutes away from the Suez Canal, a critical pathway between Asia and Europe, amid vessel attacks along the Red Sea by Iran-backed Houthis supporting Palestinians in the war.

Analysts are watching for the possibility of tensions impacting the Strait of Hormuz, located between Oman and Iran. The waterway is considered one of the largest oil chokepoints in the world.

"While the ongoing Red Sea shipping disruptions amid the escalating war in the Middle East have had only a modest impact on energy prices, a potential closure of the Strait of Hormuz would have much more significant energy price effects that would likely lower global growth," wrote Goldman Sachs analysts this week.

The bank's analysts recently reiterated their call for a range of $70-90 per barrel for Brent this year, noting "geopolitics still pose upside price risk."

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.