Oil gains 1% as it approaches a weekly gain

With ongoing tensions in the Middle East following Israel’s rejection of Hamas’ offer of a truce, oil prices increased on Friday and were expected to rise by about 7% on a weekly basis.

By 1446 GMT, US West Texas Intermediate crude futures had increased $1.02, or 1.34%, to $77.24 a barrel, while Brent crude futures had gained 79 cents, or 0.97%, on the day to $82.42 a barrel.

Following the bombardment of Gaza’s southern border city of Rafah on Thursday, which contributed to an almost 3% increase in oil prices during the previous session, Israeli forces resumed their deadly airstrikes on Gaza on Friday. “Reaching a ceasefire deal in the Middle East requires two people, and tensions in the region have not decreased,” UBS analyst Giovanni Staunovo stated.

With Israeli Prime Minister Benjamin Netanyahu’s rejection of a Hamas ceasefire proposal on Wednesday, oil futures have now seen five days in a row of increases.

“Oil participants concluded that there was not enough conflict-premium priced in, with not even a passing regard for peace, with the words ‘no part of the Gaza Strip would be immune from Israel’s offensive,'” according to PVM analyst John Evans.

In other news, on Friday, Ukraine attacked two oil refineries in southern Russia with drones, causing the Ilsky facility to catch fire. The other site targeted in the attack was the Afipsky refinery, located in Krasnodar Krai, which borders Crimea on the coasts of the Black and Azov seas.

Due to a mix of technical problems at its refineries and drone assaults, Russia is selling more crude in February than it had anticipated under an OPEC+ agreement. Regarding Russia’s OPEC+ cut quota, Commerzbank analyst Carsten Fritsch stated on Friday that “proof still needs to be provided that it is able to cut oil exports sufficiently even without weather-related constraints.”

In the meantime, the US Treasury Department sanctioned three more United Arab Emirates-based companies and one Liberian-registered vessel on Thursday for breaking a price restriction on Russian oil imposed by a group of Western countries.