The price of Brent crude surged nearly 6% on Friday, posting its biggest weekly gain since February as investors considered the possibility that the ongoing war between Israel and Hamas could spread to other regions.
The latest concerns were spurred by comments by leaders in Iran after Israel was said to be preparing for a ground incursion into the Gaza region. On Thursday, Iran's Foreign Minister Hossein Amir-Abdollahian said that a war on a new front was possible, but it depended on Israel's actions.
Brent crude hit an intraday high of $91 per barrel, up 5.8%, while U.S West Texas Intermediate crude gained 5.8% to $87.72 a barrel. Additionally, Brent posted a weekly gain of 7.5%, the highest level since February. For the week, WTI increased 5.9%.
Oil prices have been volatile through the week. After an initial spike when the war began, prices cooled as it was thought that both Israel and Palestine are not large producers of oil. The prospect of Iran blocking the strategic Strait of Hormuz shipping route was then thought to be the biggest threat.
Iran is a large producer of oil and its involvement in the war would threaten a significant portion of global supplies. West Asia, which includes Iran and the kingdom of Saudi Arabia, accounts for a third of global oil supply.
Another mitigating factor for oil prices earlier in the week was the reported build up in U.S. crude stockpiles. The latest U.S. government data showed U.S. crude inventories rose by 10.2 million barrels in the last week to 424.2 million barrels, much higher than analyst expectations for a 500,000-barrel rise. U.S. crude output also hit a record 13.2 million barrels per day in the week, the data showed.
In an earlier interview with BQ Prime, Peter McGuire, chief executive officer of XM Australia had said the broad range for crude oil would be $80 to $100 per barrel, with U.S. shale production likely to step up near the higher end of the band.
RECOMMENDED FOR YOU
Oil Holds Four-Day Gain With Focus On US Blockade Of Venezuela
A World On Edge — Iran-Israel To India-Pakistan: The Five Conflicts That Defined A Turbulent 2025
Oil Steady After Biggest Drop In Three Weeks With Glut In Focus
Oil Steadies With Global Surplus and Russian Sanctions In Focus
POPULAR