Daily Times

Oil prices rose and settled with their biggest weekly gains in over a year on the mounting threat of a region-wide war in the Middle East, although gains were limited as US President Joe Biden discouraged Israel from targeting Iranian oil facilities.

Brent crude futures rose 43 cents, or 0.6%, to settle at $78.05 per barrel, while US West Texas Intermediate crude futures gained 67 cents, or 0.9%, to close at $74.38 per barrel.

Israel has sworn to strike Iran for launching a barrage of missiles at Israel on Tuesday, after Israel assassinated the leader of Iran-backed Hezbollah a week ago. The events had oil analysts warning clients of the potential ramifications of a broader war in the Middle East.

Oil prices jumped nearly 2% during the session but pulled back sharply after Biden said that if he were in Israel’s shoes, he would consider alternatives to striking Iranian oil fields.

On Thursday, oil benchmarks surged over 5% after Biden confirmed the US was in talks with Israel over whether it would support a strike on Iranian energy infrastructure.

On a weekly basis, Brent crude gained over 8%, the most in a week since January 2023. WTI gained 9.1% week-over-week, the most since March 2023.

An attack on Iranian energy facilities would not be Israel’s preferred course of action, JPMorgan commodities analysts wrote on Friday. Still, low levels of global oil inventories suggest that prices are set to be elevated until the conflict is resolved, they added.

Citing data from ship-tracking service Kpler, they said that inventories are below last year’s levels when Brent was trading at $92 and at 4.4 billion barrels are the lowest on record.