Crude Oil prices rose on Friday, posting their biggest weekly gains in over a year due to mounting concerns about a potential region-wide conflict in the Middle East. However, gains were tempered after U.S. President Joe Biden discouraged Israel from targeting Iranian oil facilities.
Brent crude futures (LCOc1) rose by 43 cents, or 0.6%, to settle at $78.05 per barrel, while U.S. West Texas Intermediate (WTI) crude futures (CLc1) increased by 67 cents, or 0.9%, closing at $74.38 per barrel.
Tensions escalated after Israel vowed to retaliate against Iran for a missile attack on Tuesday, following the assassination of an Iran-backed Hezbollah leader the previous week. Oil analysts have been warning clients about the potential consequences of a broader Middle Eastern war on the oil markets.
Although oil prices spiked nearly 2% during Friday’s session, they pulled back sharply after Biden suggested Israel consider alternatives to striking Iranian oil facilities. On Thursday, oil benchmarks surged over 5% after Biden confirmed that the U.S. was discussing with Israel whether to support a strike on Iran’s energy infrastructure.
For the week, Brent crude rose over 8%, marking its biggest weekly gain since January 2023, while WTI gained 9.1%, the most since March 2023.
Brokerage StoneX forecasted that oil prices could increase by $3 to $5 per barrel if Iranian oil infrastructure is targeted.
On Friday, Iran’s Supreme Leader Ayatollah Ali Khamenei made his first public appearance since the missile attack, calling for increased resistance against Israel. Additionally, Revolutionary Guards Deputy Commander Ali Fadavi warned that Iran would target Israeli energy and gas infrastructure if attacked.
Iran, an OPEC+ member, produces around 3.2 million barrels per day, accounting for 3% of global output. According to Rystad analysts, the group’s spare capacity should allow other members to increase production if Iranian supplies are disrupted, potentially limiting further price hikes.
Meanwhile, supply concerns in Libya eased after the country’s eastern and Tripoli-based governments announced the reopening of all oilfields and export terminals, following the resolution of a central bank leadership dispute.
Technical Outlook – Crude Oil Futures
Crude oil surged over 11%, marking its longest weekly gains since October 2022. Prices peaked at 6360 and settled at 6339 on Friday, gaining 2.89%.
The chart shows a “Three White Soldiers” candlestick pattern, signaling continued bullish momentum. However, a break above the immediate resistance at 6445 is required to target the next resistance levels of 6538-6649.
Failure to breach this level could lead to a short-term correction of 200-250 points, which may trigger fresh buying interest.
On the downside, key support is seen at 5945, with a break below potentially pushing prices towards 5855-5765.
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Commodity Samachar Securities
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