Oil prices were heading for a weekly gain of almost 3% as today's prices ticked higher, with traders kept on edge by simmering tensions in the Middle East ahead of a planned resumption in Gaza ceasefire talks in the coming days.
Brent crude futures rose 76 cents, or 1.02%, to $75.14 a barrel this afternoon, while US West Texas Intermediate crude was up 77 cents, or 1.1%, at $70.96.
Both benchmarks have fluctuated this week, rising on Monday and Tuesday before falling on Wednesday and Thursday, largely on expectations of heightened or reduced Middle East risk.
"Uncertainty makes investors understandably and justifiably pragmatic," said PVM analyst John Evans. "Fears of supply disruptions subsided but, rest assured, they have not gone AWOL."
Investors continue to await Israel's response to an Iranian missile attack on October 1.
A response could involve strikes on Tehran's oil infrastructure, though media reports last week said Israel would strike military rather than nuclear or oil targets.
US and Israeli officials are set to restart talks for a ceasefire and the release of hostages in Gaza in the coming days.
US Secretary of State Antony Blinken said that the US does not want a protracted Israeli campaign in Lebanon, while France has called for a ceasefire and focus on diplomacy.
Investors are also seeking more clarity on China's stimulus policies, though analysts do not expect such measures to provide a major boost to oil demand.
Goldman Sachs this week left its oil price forecasts unchanged at between $70 and $85 a barrel for Brent in 2025, expecting the impact from any Chinese stimulus to be modest relative to bigger drivers such as Middle East oil supply.
Bank of America is forecasting Brent crude to average $75 a barrel in 2025 without any rolling back of OPEC+ production cuts into next year, it said in a note today.
"Market participants remain fundamentally torn between supply risks due to the tense situation in the Middle East and demand concerns," Commerzbank analysts said.
