Brent crude futures were up 9 cents, or 0.12%, to $77.71 a barrel as of 0010 GMT. U.S. West Texas Intermediate crude futures were up 8 cents, or 0.11%, to $73.79 a barrel.
Both benchmarks were on track for weekly gains of about 8%.
President Joe Biden said on Thursday the US was discussing strikes on Iran’s oil facilities as retaliation for Tehran’s missile attack on Israel. The comments contributed to a 5% rally in oil prices.
The market has started to price in the likelihood of supply disruptions in the Middle East, which accounts for about a third of global supply, ANZ analyst Daniel Hynes said.
“The move has been exacerbated by bearish investors unwinding their bets on lower prices. The move could be extended if investors start building bullish positions in oil,” Hynes said.
Israel calls for evacuations from south Lebanon, strikes central Beirut
However, the supply fears have been tempered by OPEC’s spare production capacity and the fact that global crude supplies have yet to be disrupted by the Middle East unrest.
Libya’s eastern-based government and Tripoli-based National Oil Corp announced on Thursday the reopening of all oilfields and export terminals after a dispute over leadership of the central bank was resolved, ending a crisis that had heavily reduced oil production.
Iran and Libya are both members of OPEC. Iran, which is operating under US sanctions, produced about 4.0 million barrels per day of fuel in 2023, while Libya produced about 1.3 million bpd last year, according to US Energy Information Administration data.
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