On increased concerns that the Israel-Gaza war may expand throughout the Middle East and disrupt supply from one of the world’s top-producing regions, oil prices extended gains on Friday and were on course for a second week of rises.
By 0603 GMT, Brent oil futures were up 97 cents, or 1.1%, to $93.35 per barrel. U.S. West Texas Intermediate crude was up $1, or 1.1%, at $90.37 per barrel. On Friday, the front-month November contract ends.
The more active December WTI contract was up 99 cents, or 1.1%, at $89.36 a barrel. Both contracts are expected to record a second weekly rise as this week’s explosion at a hospital in Gaza and the expected ground invasion by Israeli forces increased concerns that the Middle East crisis might escalate.
“The bigger concern remains that the escalation of tension that we’re likely to see with regard to the IDF (Israel Defense Forces) entering Gaza this weekend means the risk to crude oil is towards higher prices,” Tony Sycamore, an IG analyst, stated.
On Thursday, Yoav Gallant, the Israeli defense minister, warned troops assembled at the Gaza border that they would soon see the Palestinian enclave “from inside,” possibly indicating that the anticipated ground assault is drawing near.
According to the Pentagon, the U.S. detected missiles fired from Yemen toward Israel, which has increased concern about the conflict spreading.
If WTI prices overcome support above $91.50, they may increase toward a peak last set in late September at $95.03 per barrel, according to Sycamore.
The fourth quarter gap is expected to increase after leading producers Saudi Arabia and Russia extended production cutbacks through the end of the year, despite low stocks, particularly in the United States, supporting oil prices.
On Thursday, the U.S. Department of Energy reported that Washington is looking to purchase 6 million barrels of petroleum for delivery to the Strategic Petroleum Reserve in December and January as part of its ongoing strategy to restock the emergency stockpile.
According to OPEC+ sources who spoke to Reuters, the temporary removal of U.S. oil sanctions on OPEC member Venezuela is unlikely to require any immediate policy adjustments by the producer alliance since a production rebound is anticipated to be sluggish.
“The prospect of more Venezuelan oil did little to ease concerns about disruptions in the Middle East,” ANZ Research analysts said in a note to clients on Friday.
