Oil prices rebounded from two-week lows, climbing on Friday after U.S. warplanes bombed targets linked to Iran in eastern Syria, ratching up tensions in an already tense Middle East.
Price action
-
West Texas Intermediate crude oil
CL00,
+2.10%CL.1,
+2.10%
for December rose $1.87, or 2.2%, to $85.05 a barrel. The contract fell nearly 2.6% to settle at $83.21 on Thursday. -
December Brent crude
BRN00,
+1.94%,
the international benchmark, rose $1.76, or 1.7%, to $88.78 a barrel. Brent and WTI crude both settled at their lowest since Oct. 12, according to Dow Jones Market Data. -
November gasoline
RBX23,
+1.97%
rose 2.1% to $2.30 per gallon, while November heating oil
HOX23,
+1.01%
rose 1% to $3.07 a gallon. -
November natural gas
NGX23,
+3.24%
climbed 3.4% to $3.324 per million British thermal units
Market drivers
U.S. warplanes on Friday struck two locations in eastern Syria, which the Pentagon said is linked to Iran’s Revolutionary Guard Corps, following a string of attacks on U.S. air bases in the region that started last week.
The Pentagon claims 19 attacks in total across U.S. bases and personnel in Iraq and Syria since Oct. 17, a number that includes three fresh attacks on Thursday.
Oil prices were higher, but off stronger gains seen in Asia overnight. Oil traders remain wary of the Israel-Gaza war spreading further and possibly end up involving crude producer Iran.
“The country ramped up its daily oil production by around 500,000 barrels in the first half of the year, which according to the IEA means it is set to make the second-biggest contribution to the growth in oil. As such, Iran is again accounting for a good 10% of OPEC output,” said Barbara Lambrecht, commodity analyst at Commerzbank, in a note to clients.
Meanwhile, Israeli troops conducted a second brief raid into northern Gaza on Friday, ahead of an expected ground invasion into the Hamas-controlled territory.
Read:4 reasons why oil prices have only seen a modest Middle East risk premium
Oil prices tumbled on Thursday, partly after strong U.S. gross domestic product data stirred concerns over a potential Federal Reserve hike in December.
The economics calendar for Friday includes the PCE price index, the Fed’s favored inflation measure, which at the core level is expected to rise by 0.3% on a monthly basis ahead of a Fed meeting next week.
