Investing.com — Oil prices settled higher Friday, wrapping up a positive  week as persistent concerns over the Middle East conflict kept a risk premium in play. 

At 2:30 p.m. ET (1830 GMT), while climbed 2.2% to $71.77 a barrel, rose 2.1% to $75.96 a barrel.

Oil set for weekly gains

The crude benchmarks were trading over 2% higher this week, recovering some measure of the steep losses logged earlier in October. 

A bigger recovery in crude was held back by data showing a bigger-than-expected build in , indicating less tight supplies in the world’s biggest fuel consumer. 

A strong also weighed on crude as continued concerns over a slower pace of interest rate cuts by the Federal Reserve kept traders biased towards the greenback. 

Oil prices were trading off weekly highs as speculation over the Middle East conflict sparked some volatility in markets.

While Israel presented a harsh rhetoric against Iran this week, U.S. officials kept up their efforts to broker a ceasefire, especially before the 2024 presidential elections, which could alter future U.S. policy in the Middle East. 

Israel has vowed to attack Iran over an early-October strike, which kept traders on edge over an escalation in the conflict that could potentially disrupt supplies from the Middle East.

The number of oil rigs operating in the U.S. fell by 2 to 480, according to data Friday from energy services firm Baker Hughes.  

China stimulus in focus 

Recent weakness in oil markets was driven chiefly by concerns over slowing demand in top importer China, as a swathe of stimulus measures from the country spurred limited optimism.

Traders were underwhelmed by a lack of details from Beijing on the timing and scale of its planned measures, especially on the fiscal front. 

The Standing Committee of the National People’s Congress is now set to meet in November, where policymakers are likely to decide on plans for more fiscal spending. The committee was initially expected to meet in late October, but was delayed. 

“The market continues to be caught between supply risks related to ongoing Middle East tension and lingering demand concerns. The outlook for a comfortable 2025 oil balance will also be playing a role in price action,” said analysts at ING, in a note.

(Peter Nurse, Ambar Warrick contributed to this article.) 

By Florence Tan and Alex Lawler

SINGAPORE/LONDON (Reuters) – Oil prices are expected to fall when trading resumes on Monday as Israel’s retaliatory strike on Iran over the weekend bypassed Tehran’s oil and nuclear infrastructure and did not disrupt energy supplies, analysts said.

and U.S. West Texas Intermediate crude futures gained 4% last week in volatile trade as markets priced in uncertainty around the extent of Israel’s response to the Iranian missile attack on Oct. 1 and the U.S. election next month.

Scores of Israeli jets completed three waves of strikes before dawn on Saturday against missile factories and other sites near Tehran and in western Iran, in the latest exchange in the escalating conflict between the Middle East rivals.

“The market can breathe a big sigh of relief; the known unknown that was Israel’s eventual response to Iran has been resolved,” Harry Tchilinguirian, group head of research at Onyx said on LinkedIn.

“Israel attacked after the departure of U.S. Secretary of State Antony Blinken, and the U.S. administration could not have hoped for a better outcome with U.S. elections less than two weeks away.”

Iran on Saturday played down Israel’s overnight air attack against Iranian military targets, saying it caused only limited damage.

“Israel’s not attacking oil infrastructure, and reports that Iran won’t respond to the strike remove an element of uncertainty,” Tony Sycamore, IG market analyst in Sydney, said.

“It’s very likely we see a ‘buy the rumour, sell the fact’ type reaction when the futures markets reopen tomorrow,” he said, adding that WTI may return to $70 a barrel level.

Tchilinguirian expects geopolitical risk premium that had been built into oil prices to deflate rapidly with Brent heading back towards $74-$75 a barrel.

UBS commodity analyst Giovanni Staunovo also expects oil prices to be depressed on Monday as Israel’s response to Iran’s attack appeared to have been restrained.

“But I would expect such downside reaction to be only temporary, as I believe the market didn’t price a large risk premium,” he added.

Investing.com — Oil prices settled higher Friday, wrapping up a positive  week as persistent concerns over the Middle East conflict kept a risk premium in play. 

At 2:30 p.m. ET (1830 GMT), while climbed 2.2% to $71.77 a barrel, rose 2.1% to $75.96 a barrel.

Oil set for weekly gains

The crude benchmarks were trading over 2% higher this week, recovering some measure of the steep losses logged earlier in October. 

A bigger recovery in crude was held back by data showing a bigger-than-expected build in , indicating less tight supplies in the world’s biggest fuel consumer. 

A strong also weighed on crude as continued concerns over a slower pace of interest rate cuts by the Federal Reserve kept traders biased towards the greenback. 

Oil prices were trading off weekly highs as speculation over the Middle East conflict sparked some volatility in markets.

While Israel presented a harsh rhetoric against Iran this week, U.S. officials kept up their efforts to broker a ceasefire, especially before the 2024 presidential elections, which could alter future U.S. policy in the Middle East. 

Israel has vowed to attack Iran over an early-October strike, which kept traders on edge over an escalation in the conflict that could potentially disrupt supplies from the Middle East.

The number of oil rigs operating in the U.S. fell by 2 to 480, according to data Friday from energy services firm Baker Hughes.  

China stimulus in focus 

Recent weakness in oil markets was driven chiefly by concerns over slowing demand in top importer China, as a swathe of stimulus measures from the country spurred limited optimism.

Traders were underwhelmed by a lack of details from Beijing on the timing and scale of its planned measures, especially on the fiscal front. 

The Standing Committee of the National People’s Congress is now set to meet in November, where policymakers are likely to decide on plans for more fiscal spending. The committee was initially expected to meet in late October, but was delayed. 

“The market continues to be caught between supply risks related to ongoing Middle East tension and lingering demand concerns. The outlook for a comfortable 2025 oil balance will also be playing a role in price action,” said analysts at ING, in a note.

(Peter Nurse, Ambar Warrick contributed to this article.)