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Oil prices rose for a third straight session early on Friday as the war in Israel continues to add a risk premium amid worries over a widening conflict as supplies remain lower than demand for the commodity. West Texas Intermediate crude oil for November delivery was last seen up $1.09 to $90.46 per barrel, while December Brent crude, the global benchmark, was up 97 cents to $93.35.
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The rise comes as Israel prepares an anticipated ground offensive in Gaza. The country's war against Gaza is raising tensions in the wider Middle East, with Iranian-backed militias fighting Israeli forces at the Israel-Lebanon border, while a U.S. naval destroyer shooting down missiles fired from Yemen.
"Oil prices raced higher on Thursday as deepening Middle East tensions puts market on edge," Saxo Bank reported.
Rising tensions come as supplies remain tight following OPEC+ quota reductions and Saudi Arabia's 1 million barrel per day voluntary production cut. The Biden administration this week lifted some sanctions on Venezuela in order to return some supply from the country with the world's largest reserves after it agreed to freer elections, though it is likely to have limited impact.
"Treasury issued a six-month license that authorizes transactions in Venezuela's oil sector, noting that the sanctions are designed to snap back if election progress is not made. While there have been some headlines forecasting a large resurgence of Venezuelan crude, market expectations are an incremental 200-300 kb/d," Helima Croft, head of Global Commodity Strategy and MENA Research at RBC Capital Markets, said in a note.
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