Oil futures: Crude posts 10% weekly gains, Israel response eyed  

Quantum Commodity Intelligence – Oil futures Friday were climbing higher as crude benchmarks extended the week's gains to 10% amid a spike in geopolitical tension and potential threats to oil supplies.

Front-month Dec24 ICE Brent futures were trading at $79.05/b (1750 GMT), compared to Thursday's settle of $77.62/b and an intraday high of $79.30/b.

At the same time Nov24 NYMEX WTI was trading at $75.05/b versus Thursday's settle of $73.71/b.

Prices ramped up to fresh six-week highs in the previous session on growing speculation that Israel would target Iran's oil infrastructure in retaliation for Tuesday's missile attack.

When asked about any possible Israeli strikes on Iran's oil infrastructure, US President Joe Biden said in an off-the-cuff remark: "We're discussing that."

It was enough to send benchmarks to fresh highs and while Pentagon officials declined to offer further details, speculation intensified for an Israeli response as early as this weekend.

"Investors are bracing for what could be Israel's strike on Iran's critical oil infrastructure, Kharg Island, where a whopping 90% of Iran's oil exports pass through," said Stephen Innes of SPI Asset Management.

Shipping reports indicated increased activity around Kharg Island, with the National Iranian Tanker Company (NITC) relocating or discharging tankers anchored around the terminal.

According to a Bloomberg production survey, Iran pumped at a six-year high of 3.37 million bpd in August before easing to 3.34 million bpd in September.

Around 1.5 million bpd of this oil is exported, primarily to China, while analysts have noted that OPEC+ spare capacity of around 6 million bpd could easily cover any Iranian shortfalls.

Overnight Thursday, the Israeli military launched a series of strikes on Beirut, with senior Hezbollah figures said to be targeted.

Macroeconomics have largely taken a backseat in the second half of the week. Friday's US Non-Farm Payroll report revealed a 254,000 increase against the expected 150,000 jobs.