Escalating Middle East tensions were driving up oil prices on Friday, amid rising fears that Israel is close to launching a ground invasion of Gaza after its military ordered more than a million people in the territory to flee south.
West Texas Intermediate crude for November delivery
climbed $3.36, or 4%, to $86.27 a barrel. Crude prices fell 0.7% to $82.91 a barrel on the New York Mercantile Exchange on Thursday.
December Brent crude
the global benchmark, jumped $3.32, or 3.8%, to $89.32 a barrel on ICE Futures Europe after closing up 18 cents, or 0.2%, to $86 a barrel on Thursday.
jumped 3% to $2.23 a gallon, while November heating oil
rose 1.5% to $3.09 a gallon
Natural gas for November delivery
fell 1.6% to $3.29 per million British thermal units.
Oil prices were breaking with a three-session skid on Friday as investors watched headlines coming out of the Middle East. The Israeli military ordered around 1 million people in northern Gaza on Friday to evacuate to the south.
That represents nearly half the population of the territory, and such an evacuation would be not only impossible, but disastrous, said the U.N., whose people on the ground were also warned to leave the area. The fresh escalation has raised fears that Israel is about to embark on a ground invasion.
Ole Hansen, head of commodity strategy at Saxo Bank, said oil markets were climbing with “Israel ordering an impossible evacuation of 1 m from Northern Gaza, probably ahead of an invasion and Iran talking up the threat of supporting resistance.”
Iran’s Foreign Minister Hossein Amirabdollahian indicated that Iran-backed Hezbollah militants in the area could open up another front if the continuing siege of Gaza and attacks by Israel continue, Bloomberg reported on Friday.
“Of course in the case of the continuation of war crimes and the humanitarian blockade of Gaza and Palestine every possibility and decision by the other currents of the resistance is possible,” Amirabdollahian told reporters in Beirut.
The evacuations were ordered nearly one week after Hamas launched an unprecedented attack on Israel, killing more than 1,200 people. To date, the conflict has left more 2,800 people dead on both sides.
Oil prices retreated on Thursday after a U.S. government report showed a more than 10 million-barrel weekly rise in domestic crude inventories, and an increase in U.S. oil production to its highest on record.