Oil benchmarks head for weekly gain
IEA lifts demand growth forecast, sees well supplied market
North Dakota oil output remains 40 lower due to cold weather

LONDON, Jan 19 Reuters Oil rose on Friday, heading for a weekly gain, as Middle East tensions and oil output disruptions caused by cold weather in the U.S., the world39;s biggest producer, overshadowed concerns about the health of the Chinese and global economy.

Pakistan launched strikes on separatist militants inside Iran on Thursday in a retaliatory attack, while the U.S. launched new strikes against Houthi antiship missiles aimed at the Red Sea.

Brent crude futures rose 26 cents, or 0.3, to 79.36 a barrel by 0910 GMT, while U.S. West Texas Intermediate crude futures WTI were up 20 cents to 74.28.

While the price of crude remains sensitive to events in the Middle East, as we39;ve seen over the last couple of weeks, the oil market remains well balanced, said Craig Erlam, analyst at brokerage OANDA.

Supply disruptions remain an upside risk but there are downside risks too including the global economy.

For the week, the U.S. benchmark is on track to rise about 2 while Brent is set to gain 1. Both markers climbed on Thursday after the International Energy Agency IEA raised its 2024 oil demand growth forecast.

As tensions in the Middle East are spreading, traders don39;t want to take short positions, but they are also cautious about continuing to build long positions as China39;s economic recovery remains…