Oil up on Middle East supply worries

Oil prices climbed about 3% to a one-week high on Friday on worries that tensions in Israel and Gaza could spread into a wider conflict that could disrupt global crude supplies.Brent futures rose US$2.55, or 2.9%, to settle at US$90.48 a barrel, while US West Texas Intermediate (WTI) crude rose US$2.33, or 2.8%, to settle at US$85.54.Brent&#039;s premium over WTI rose to its highest since March, making it more attractive for energy firms to send ships to the U.S. to pick up crude for export.For the week, Brent was down about 2% and WTI down about 4%.Trading was choppy. Early in the session, oil prices soared by more than US$2 a barrel after the US military struck Iranian targets in Syria. Then prices briefly turned negative as markets digested various reports on mediation talks between the militant Hamas group and Israel led by Qatar in coordination with the US.Price swings"We are at the mercy of the next headline ... and I think that&#039;s kind of what we&#039;ve been seeing today with the price swings," said Phil Flynn, an analyst at Price Futures Group."You&#039;d like to be trading the fundamentals, but you really can&#039;t because you&#039;ve got to be more worried about ... what&#039;s going to happen in the Middle East," Flynn said. "No one wants to be short over the weekend."Israeli air and ground forces were stepping up operations in the Gaza Strip amid reports of heavy bombing of the besieged enclave.Red linesMiddle East developments have so far not directly affected oil supplies, but many fear disruptions of exports from major crude producer and Hamas backer Iran and others."[It] remains incredibly difficult even for the most knowledgeable regional watchers to make high conviction calls about the trajectory of the current crisis, as the red lines that could bring more players onto the battlefield remain largely indiscernible," RBC Capital analyst Helima Croft said.Goldman Sachs analysts retained their first-quarter 2024 Brent crude price forecast at US$95 a barrel but added that lower Iranian exports could cause baseline prices to rise by 5%.Prospects for oil demand were uncertain. - Reuters

Oil up on Middle East supply worries

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Oil up on Middle East supply worries

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