Oil set for biggest weekly gains in two years

Oil prices rose for a fourth consecutive session on Friday as investors braced for a potential Israeli strike on Iranian energy infrastructure, setting up crude benchmarks for their biggest weekly gains since OPEC+ began curtailing output two years ago.

Brent crude futures rose by $1.04, or 1.3%, to $78.66 per barrel by 12:36 pm ET, while US West Texas Intermediate futures gained $1.19, or 1.6%, to $74.90 per barrel.

On a weekly basis, both benchmarks were set to gain more than 9% - the most in a single week since the Organisation of the Petroleum Exporting Countries and allies (OPEC+) agreed to steep oil production cuts in October 2022.

Both contracts rose more than 5% on Thursday after US President Joe Biden acknowledged that the White House was in talks with Israel about whether or not it will support a strike on Iranian oil facilities. "We're discussing that," Biden said on Thursday, sending oil futures surging immediately.

Oil analysts have since rushed to alert clients about the potential ramifications from a widening war in the Middle East.

Israel said on Friday it had targeted Iranian proxy Hezbollah's intelligence headquarters in Lebanon overnight and was assessing the damage, while Iran's supreme leader called on allies to step up their anti-Israel struggle.

An attack on Iranian energy facilities would not be Israel's preferred course of action, JPMorgan commodities analysts wrote on Friday. Still, low levels of global oil inventories suggest that prices are set to be elevated until the conflict is resolved, they added.

Citing data from ship-tracking service Kpler, they said that inventories are below last year's levels when Brent was trading at $92 and at 4.4 billion barrels are the lowest on record.