(Bloomberg) -- Oil rose, notching a gain for the week, as traders kept an eye on the risk of escalation in the Middle East conflict and a deluge of other potentially pivotal market drivers.
West Texas Intermediate climbed 2.3% to settle near $72 a barrel, while global benchmark Brent settled just above $76. The US benchmark pushed past its 50-day moving average of about $71.65, a technical level that can contribute to accelerated buying from algorithmic traders.
WTI swung in a range of more than $3.50 over the last five sessions as tensions in the Middle East remain high. The US has signaled to Saudi Arabia — the largest source of OPEC’s spare capacity — that it’s ready to help defend the kingdom in the event of an escalation. The New York Times reported that Iran has ordered its armed forces to be prepared for war, though it’s also trying to avoid it.
“If we had progress on cease-fire talks, that would probably calm the market a little more, but that’s not happening,” said Rob Haworth, senior investment strategist at US Bank. “So the market does have to tense up ahead of the weekend.”
The market is also monitoring any possible changes to output plans from the Organization of Petroleum Exporting Countries and its allies as well as the outlook for the US election, which is now less than two weeks away. The array of potential catalysts has spurred frenzied trading in options markets as traders seek to protect against price swings, while volumes have been comparatively more limited in futures.
Oil has been whipsawed this month by the tensions in the Middle East, as well as concerns that the market may face a glut next year, driven by output growth from non-OPEC+ producers and plans by the cartel to ease curbs.
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