Oil prices continued to surge on Friday, poised for their second consecutive weekly gain as growing concerns over the Israel-Gaza conflict potentially spreading throughout the Middle East raised apprehensions about oil supply disruptions from this major global production hub.
Brent crude oil, against which Nigerian oil is priced, rose by 75 cents to $93.13 per barrel while U.S. West Texas Intermediate (WTI) crude was up 67 cents to $90.04 a barrel.
The prospect of heightened hostilities and an expected ground invasion in Gaza intensified concerns of the conflict’s expansion in the Middle East, subsequently driving the oil market upward.
“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 prices is towards higher levels,” commented IG analyst Tony Sycamore.
Moreover, the Pentagon disclosed that the U.S. had intercepted missiles fired from Yemen towards Israel, further heightening anxiety about the widening of the conflict’s impact.
These concerns, along with projections of a deepening supply deficit in the fourth quarter, have contributed to oil’s price gains. Leading producers like Saudi Arabia and Russia have extended supply cuts through the end of the year.
In a move to bolster its emergency stockpile, the U.S. Department of Energy announced that Washington seeks to purchase six million barrels of crude for delivery to the Strategic Petroleum Reserve in December and January.
Furthermore, the temporary lifting of U.S. oil sanctions on OPEC member Venezuela, while gradually restoring production, is not expected to necessitate any policy modifications by the OPEC+ producer group in the near term.
“Venezuelan oil production will not be a significant factor in shaping the global oil balance in the foreseeable future,” noted Tamas Varga of oil broker PVM.