Geopolitical risk and Hurricane Milton push oil prices to a weekly gain

Crude oil prices retreated towards the end of the week but still look set for another weekly gain, supported by the situation in the Middle East and concerns about security of supply.

In a new update, Reuters reported that Gulf states were lobbying Washington to persuade Israel not to target Iranian oil sites out of fear that doing so would provoke retaliatory attacks by Iran-affiliated groups on those states’ own oil infrastructure. Golf.

“The Iranians have said, ‘If the Gulf states open their airspace to Israel, it would be an act of war,'” a Saudi analyst close to the kingdom’s ruling family told Reuters.

“The Gulf States do not let Israel use their airspace. They will not allow Israeli missiles to pass and there is also the hope that they will not hit the oil installations,” said an anonymous source in the Gulf. The oil kingdoms have made it clear earlier that they will not take part in that war.

The possibility of such a development has clear bullish implications for oil prices in the event of an oil-focused escalation, especially in light of Israel’s apparent decision not to consult the US on everything it does on and off the battlefield.

Hurricane Milton also helped boost oil prices this week after making landfall in Florida, although it did not cause the devastation expected of a Category 5 hurricane as it lost much of its destructive power before landfall .

“Investors are assessing how hurricane damage could affect the US economy and fuel demand,” NS Trading President Hiroyuki Kikukawa told Reuters. “Oil prices are likely to hover around current 200-day average levels, with the main concern being whether Israel will retaliate against Iranian oil facilities.”

Benchmarks added about 3 percent on Thursday as the Israeli government met to discuss its move to retaliate against Iran. Earlier on Friday, Brent crude was hovering around $80, with West Texas Intermediate above $75 a barrel.

By Irina Slav for Oilprice.com

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