Oil scores back-to-back weekly gains as Israel-Hamas war raises risks in

Oil futures settled with a loss on Friday, but scored a second straight weekly gain after the Oct. 7 attack on Israel by Hamas sparked a war that threatens to spillover across the region, potentially endangering the supply of crude.

Natural-gas prices, meanwhile, marked an eighth consecutive session decline after a U.S. government report on Thursday revealed a bigger-than-expected weekly rise in supplies of the fuel.

Price action

  • On its expiration day, West Texas Intermediate crude for November delivery


    fell 62 cents, or 0.7%, to end at $88.75 a barrel on the New York Mercantile Exchange, for a 1.2% weekly rise, according to Dow Jones Market Data. December WTI
    which is the new front-month contract
    shed 29 cents, or 0.3%, to settle at $88.08 a barrel.

  • December Brent crude

    the global benchmark, fell 22 cents, or 0.2%, at $92.16 a barrel on ICE Futures Europe, ending 1.4% higher for the week.

  • November gasoline

    rose 0.5% to $2.37 a gallon, for a 4.8% weekly advance. November heating oil

    declined by 0.5% to settle at $3.16 a gallon, but logged a 1.7% weekly fall.

  • November natural gas

    lost 2% to $2.90 per million British thermal units, for a more than 10% weekly slide.

Market drivers

“The volatility of crude prices continues to be influenced by the escalating conflict between Israel and Hamas, despite the minimal direct impact on actual supply and demand conditions,” Brian Swan, senior commodity analyst, Global Research & Analytics, at Schneider Electric wrote in a daily note.

Oil was lifted in electronic trade late Thursday after a U.S. Navy warship has intercepted multiple missiles near Yemen. A Pentagon press secretary told reporters that a Navy destroyer intercepted three missiles and several drones that were launched by Iran-backed Houthi forces in Yemen, but their target was unknown.

With the Houthi and other terrorist factions “entering the picture with missiles firing everywhere, shipping markets are highly vulnerable to these developments in the Middle East,” said Stephen Innes, managing partner at SPI Asset Management, told MarketWatch.

Read: Here’s what the Israel-Hamas war has done to U.S. gasoline and diesel prices

He sees two distinct geopolitical scenarios to consider. The first one is a conflict that remains “localized within Israel, which will have minimal impact on oil prices,” and the other is a situation that “escalates into a broader regional conflict that impacts shipping activities through the Strait of Hormuz.”

Expectations for an imminent…

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