By Santosh Menon

The gains were trimmed back later in the day, however, as dealers focused on U.S. economic turmoil that has already triggered a significant slowdown in oil consumption in the world's biggest energy user.

U.S. crude rose $2.15 to $143.80 a barrel by 12:48 p.m. EDT after climbing as high as $147.27 earlier in the day. It rose $5.60 or 4 percent a barrel on Thursday in a late burst of buying activity. London Brent crude was up $1.52 at $143.55 a barrel.

"The market is just so sensitive today over Iran, Nigeria, Brazil," a floor trader on the New York Mercantile Exchange said. "But you are also seeing a big slide on stock market prices and this is driving some fears to oil traders."

A spate of missile tests by Iran, the world's fourth-largest oil exporter, in the last two days against a backdrop of rising tensions with Israel and the United States has left the oil markets worried.

Iran has threatened to strike back at Tel Aviv as well as U.S. interests in a key oil shipping route if it is attacked over its nuclear program, which Israel and the West fears is aimed at making nuclear weapons.

Adding to geopolitical jitters, the Movement for the Emancipation of the Niger Delta, the main militant group in Nigeria's oil-producing region, said it was abandoning a cease-fire to protest against a British offer to help tackle lawlessness in the region.

Rebel attacks on oil infrastructure in Nigeria, the world's eighth-biggest exporter, have also been partly responsible for the nearly 50 percent rise in prices this year.

And workers at Brazil's Petrobras will launch a five-day strike next week that would affect all 42 Campos basin offshore platforms, which account for more than 80 percent of daily oil output of around 1.8 million barrels, a union official said.

Oil prices have risen seven-fold since 2002 amid surging demand from China and other developing economies. Investors have also recently flocked to oil and other commodities as a hedge against rising inflation and a weak dollar.

Concern in the United States that Fannie Mae and Freddie Mac , the nation's largest mortgage financing providers, could run short of capital added to inflation worries by reducing the chances of an interest rate hike this year by the U.S. Federal Reserve, some analysts said.

Oil has continued to rise despite efforts by top exporter Saudi Arabia to raise production to its highest rate in three decades in an effort to tame oil prices.

Qatar Oil Minister Abdullah al-Attiyah told Reuters on Friday that he saw no demand for the additional crude that Saudi Arabia had pledged to pump.

(Additional reporting by Felicia Loo in Singapore, Richard Valdmanis in New York; Editing by Marguerita Choy)