* World leaders pressure U.S. over Syria at G20 summit
* Oil producers in Iraq fret about Syria, boost security
* U.S. job data misses expectations (Adds details on prices, new quote)
NEW YORK, Sept 6 U.S. crude oil futures settled on Friday at their highest level in more than two years as investors rushed to buy amid concerns a possible military strike against Syria could cause oil prices to spike.
Investors feared a U.S.-led military strike against Syria would stir broader conflict in the Middle East, which pumps a third of the world's oil.
"The longs piled back in on regional fears related to Syria," said Gene McGillian, energy analyst with Tradition Energy in Stamford, Connecticut.
U.S. crude oil for October delivery settled up 2 percent, or $2.16 per barrel, at $110.53. The last time crude oil futures settled above that level was on May 3, 2011, at $111.05.
Brent oil, the global benchmark, has already priced in geopolitical concern over Syria. Brent crude oil futures for October delivery settled up 86 cents per barrel to $116.12, on Friday.
The U.S. Congress is expected to vote next week on President Barack Obama's proposal to launch a missile strike to punish Syrian President Bashar al-Assad for his suspected use of chemical weapons against civilians.
"The escalation of the rhetoric and tension has certainly gotten the crude oil market's attention," said Andy Lebow, vice president with Jefferies Bache in New York.
At the G20 summit in St. Petersburg, Russia, Obama has faced growing pressure from Russia, China, the European Union and major emerging market countries not to carry out a strike without support from the U.N. Security Council.
But Obama said failure to act against Syria's use of chemical weapons would embolden "rogue nations" to use them too. Obama said he would address the American people on Syria on Tuesday.
Obama declined to say whether he would proceed with a strike against Syria even if Congress votes "No."
U.S. oil rallied more sharply Brent as some investors rushed to cover short positions ahead of the weekend while others bought aggressively. U.S. oil was playing catch up, said Rich Ilczyszyn, chief market strategist and founder of iitrader.com LLC in Chicago.
"Right here you have speculators in WTI. Brent was already pricing in the action, that's why you see a bigger bid in WTI."
U.S. crude settled with its largest weekly percentage gain in two months, at 2.7 percent, the highest since July 5. It was the largest daily percentage gain since Aug. 27.
Rising U.S. oil prices cut Brent's premium to U.S. crude oil to its narrowest in more than to weeks. The spread settled CL-LCO1=R at $5.59 per barrel.
U.S. crude extended slight gains after the Labor Department said nonfarm payrolls increased 169,000 last month, but the jobs number was less than the market expected.
The weak jobs data coupled with worries over Syria supported the market. The data likely means "the Fed does not have room to pull back on its stimulus program," McGillian said, which has been largely seen as supporting commodities prices.
The Brent market has also been focused on, and supported by, tighter supplies in recent months as Libya has reduced output. North Sea crude, which underpins the Brent oil contract, has faced some supply disruptions.
North Sea producers were expected to boost supplies next month.
Saudi Arabia produced a record 10.10 million barrels of crude oil per day (bpd) in August, and supplied the market with 10.07 million bpd, industry sources said.
Late last month, the top OPEC oil producer, said it would pump a record 10.5 million bpd of crude in the third quarter, its highest quarterly level of production ever, U.S. energy consultancy PIRA said. (Additional reporting by Lin Noueihed in London and Florence Tan in Singapore; Editing by Bernadette Baum, David Gregorio and Carol Bishopric)
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