A Mobil gas station in Los Angeles, California, US, on Tuesday, April 2, 2024. US crude futures hit $85 a barrel in New York for the first time since October, as OPEC+ supply cuts underpin a steadily strengthening market.
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Crude oil futures rose Thursday, recouping losses from earlier in the session as tensions in the Middle East continue to mount.
The West Texas Intermediate contract for May delivery gained $1.16, or 1.36%, to settle at $86.59 a barrel. The Brent contract for June delivery advanced $1.30, or 1.45%, to $90.65 a barrel. It was the highest settle for both since Oct. 20.
The Jerusalem Post reported that Israeli embassies had been put on high alert after Iran vowed retaliation over a missile strike on its consulate in Damascus earlier this week. Israel Defense Forces have cancelled home leave for combat troops amid mounting tensions with Tehran, according to the Times of Israel.
And President Biden on Thursday warned Israel Prime Minister Benjamin Netanyahu that strikes against aid workers and the humanitarian situation in Gaza are "unacceptable." Biden told Netanyahu that U.S. policy on the war in Gaza will be determined by steps Israel takes to address humanitarian suffering.
The president's warning came after an Israeli strike killed seven aid workers with the World Central Kitchen, including a U.S.-Canadian dual citizen.
Oil Prices, Energy News and Analysis
Oil prices have rallied this year, booking three consecutive months of gains with U.S. crude adding 19% while Brent is up about 16%.
Prices at the pump averaged $3.57 per gallon nationwide Thursday, the highest level since Oct. 18, according to data from the motorist association AAA. Gasoline prices typically rise as the summer driving season draws closer, but mounting geopolitical tensions and tight crude market are also at play.
The crude oil rally comes as the wars in Eastern Europe and the Middle East raise renewed fears about supply disruptions. Ukraine has repeatedly struck Russian oil refineries, reducing the OPEC+ member's capacity.
The global oil market is also expected to enter a deficit of 450,000 barrels per day in the second quarter as demand grows while global inventories fall as OPEC+ members voluntarily slash production, according to Bank of America.
An OPEC+ committee on Wednesday recommended no changes to the group's current production policy. Some members are voluntarily slashing 2.2 million barrels per day.
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