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SINGAPORE : Oil prices extended gains on Friday, rising about 1 per cent on fears that the Israel-Gaza conflict may spread in the Middle East and disrupt supplies from one of the world’s top-producing regions.
Brent crude futures climbed 77 cents, or 0.8 per cent, to $93.15 a barrel by 0042 GMT. U.S. West Texas Intermediate crude was at $90.36 a barrel, up 99 cents, or 1.1 per cent. The front-month November contract expires on Friday.
The more active December WTI contract was at $89.13 a barrel, up 76 cents.
Both contracts are on track to post a second weekly gain as an explosion at a Gaza hospital this week and the anticipated ground invasion by Israeli troops heightened fears of the conflict spreading in the Middle East.
“It’s quite scary in fact, looks like things could spiral out of control,” IG analyst Tony Sycamore said. “The bigger concern remains that the escalation of tension that we’re likely to see with regard to the IDF (Israel Defence Forces) entering Gaza this weekend means the risk to crude oil are towards higher prices.”
Israeli Defence Minister Yoav Gallant told troops gathered at the Gaza border on Thursday that they would soon see the Palestinian enclave “from inside”, suggesting an expected ground invasion could be nearing.
U.S. intercepted missiles fired from Yemen toward Israel, Pentagon said.
WTI prices could rise towards a high last seen in late September at $95.03 a barrel if it breaks resistance at $91.50, Sycamore said.
Oil price are also supported by forecasts of widening deficit in the fourth quarter after top producers Saudi Arabia and Russia extended supply cuts to the end of the year and amid low inventories especially in the United States.
Washington is seeking to buy 6 million barrels of crude for delivery to the Strategic Petroleum Reserve in December and January, as it continues its plan to replenish the emergency stockpile, the U.S. Department of Energy said on Thursday.
Separately, a temporary lifting of U.S. oil sanctions on OPEC member Venezuela is unlikely to require any policy changes by the OPEC+ producer group for the time being as a recovery in production is likely to be gradual, OPEC+ sources told Reuters.
Venezuelan state-run oil company PDVSA has begun contacting customers with crude supply contracts, two people familiar to the matter said on Thursday, moving to resume cash sales to global refiners.
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