Oil prices rose after a report that Iran may be preparing to attack Israel from Iraqi territory in the coming days, refocusing the market on the possibility of supply disruptions due to war in the Middle East, Reuters reported .
West Texas Intermediate crude rose as much as 3.2% on Friday before paring gains to settle below $70 a barrel, up 0.3% during the session, while Brent crude rose 0.4% to settle near $73 .
Before that, oil prices fell 3.2% during the week, which followed the limited Israeli attack on Iran over the weekend, a move that dampened some traders’ expectations that the conflict could threaten the region’s energy infrastructure .
But after Monday’s sharp decline, some analysts warned that the market had “cooled down too quickly,” and there were signs on Friday that oil options markets were returning to pricing large premiums for bullish call contracts .
Meanwhile , Iran is planning an attack through armed groups it supports in Iraq, and the attack is expected to be carried out using drones and ballistic missiles, according to the Axios website, quoting two unnamed Israelis .
Although the report issued yesterday, Thursday, initially caused futures prices to rise, the rise faded as traders questioned the likelihood and extent of the potential conflict .
In this regard, Pavel Molchanov, an analyst at Raymond James & Associates , told Reuters that Israel and Iran are conducting a “semi-planned show of force to try to show strength without triggering a full-scale war, but nevertheless, the daily headlines coming out of the Middle East are strong .”
Oil prices pared gains after U.S. economic data showed the country added fewer jobs than expected last month, although the numbers were distorted by storms and labor disputes .
Developments in the Middle East this week point to a possible easing of hostilities, with Israel also considering a US-led proposal to end the conflict in Lebanon. However, the Israeli military said the country would respond “with great violence” if Iran attacked again .
The oil market is bracing for a number of major events, including the US presidential election, a meeting of China’s top legislative body next week, and OPEC+’s expected move on whether to begin gradually restoring production starting in December.
