(Bloomberg) -- Oil edged lower — while remaining on course for a second weekly gain — as Israel readied plans to retaliate against Iran, raising the specter of disruptions to crude supplies from the Middle East.
Global benchmark Brent was near $79 a barrel, more than 1% higher this week, while West Texas Intermediate was below $76. Israeli Prime Minister Benjamin Netanyahu’s security cabinet met on Thursday to discuss how and when the country was going to respond to Iran’s recent missile attack.
The global crude market has zeroed in on potential supply risks this month following the latest escalation in Middle East tensions. While US President Joe Biden has counseled against an attack on energy facilities in the third-largest OPEC producer, the possibility remains, putting investors on edge.
Earlier this week, Israel Defense Minister Yoav Gallant said his nation’s planned move would be “deadly, precise and above all surprising,” while Iran pledged to respond in turn to any attack, raising the prospect of another tit-for-tat exchange. The Middle East accounts for about a third of global crude supply, and the region is home to several critical chokepoints.
The geopolitical concerns have boosted volatility, and prompted hedge funds to add more net-long positions. Still, concerns about the outlook for consumption — especially in China — have weighed on the market. Beijing has scheduled a briefing for this weekend that’s expected to give more details on stimulus.
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