Shafaq News/ Oil prices climbed about 3% to a one-week high on Friday on worries that tensions in Israel and Gaza could spread into a wider conflict that could disrupt global crude supplies.
Brent futures rose $2.55, or 2.9%, to settle at $90.48 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $2.33, or 2.8%, to settle at $85.54.
Brent's premium over WTI rose to its highest since March, making it more attractive for energy firms to send ships to the U.S. to pick up crude for export.
For the week, Brent was down about 2% and WTI down about 4%.
Despite a 20-cent dip on Friday, Basra's heavy and light crudes closed at $86.06 and $89.2, respectively; $1.02 above last week.
Trading was choppy. Early in the session, oil prices soared by more than $2 a barrel after the U.S military struck Iranian targets in Syria. Then prices briefly turned negative as markets digested various reports on mediation talks between the militant Hamas group and Israel led by Qatar in coordination with the U.S.
Israeli air and ground forces were stepping up operations in the Gaza Strip amid reports of heavy bombing of the besieged enclave.
A Hamas official, meanwhile, conditioned the release of hostages in Gaza on a ceasefire in Israel's bombardment of the Palestinian enclave, launched after a deadly Hamas rampage into southern Israel nearly three weeks ago.
Several countries, including many Arab states, have urged Israel to delay a planned ground invasion that would multiply civilian casualties and might ignite a wider conflict.
Middle East developments have so far not directly affected oil supplies, but many fear disruptions of exports from major crude producer and Hamas backer Iran and others.
"(It) remains incredibly difficult even for the most knowledgeable regional watchers to make high conviction calls about the trajectory of the current crisis, as the red lines that could bring more players onto the battlefield remain largely indiscernible," RBC Capital analyst Helima Croft said.
Goldman Sachs analysts retained their first-quarter 2024 Brent crude price forecast at $95 a barrel but added that lower Iranian exports could cause baseline prices to rise by 5%.
Prospects for oil demand were uncertain.
U.S. consumer spending surged in September but was seen cooling off in early 2024. Some economists believe the U.S. Federal Reserve is done raising interest rates to fight inflation, which can slow economic growth and reduce oil demand.
But, economists told Reuters they expect high inflation will continue to dog the world economy next year.