Oil prices rose during trading on Friday amid reports from the occupying government that Iran may be preparing to attack the occupied territories from Iraq sometime in the coming days, raising market concerns about the possibility of renewed escalation in the Middle East.

In terms of trading, Brent crude prices increased by about 2.1% to trade at $74.10 a barrel, while West Texas Intermediate crude prices rose by 1.86% to record $70.66 a barrel, with both crude types heading for weekly gains exceeding 3.5% so far.

This came after Axios reported, citing Israeli sources, that Iran plans to launch an attack using the militias supported by the Persian state in Iraq, indicating that it is expected to be carried out using drones and ballistic missiles, according to the report.

Oil prices had fallen earlier in the week following the limited Israeli attack on Iran in retaliation for the Iranian response on October 1, leading to a rapid decline in the risk premium on oil and a shift in focus to weak demand forecasts.

However, the possibility of a return to escalating situations in the region again has heightened investor fears about a renewed escalation of conflict in the Middle East, especially following the Israeli invasion of Lebanese territories in recent months, and the potential impacts of this on oil supplies from the region.

This comes at a time when the oil market is anticipating several key data and events that could significantly affect prices, ranging from the U.S. elections and the upcoming meeting of China's highest legislative body scheduled for next week, to the anticipated production adjustment decisions in December.

Meanwhile, manufacturing activity in China rebounded more than expected in October despite the Golden Week holiday, and the positive reading provided a sign of stability after Beijing announced recent economic stimulus measures to support the economy.