Oil futures fell on Friday but still posted their biggest weekly gain in more than a year as President Biden moved to discourage Tel Aviv from targeting Iranian crude installations following Tehran’s recent missile attack on Israel.
West Texas Intermediate (CL=F) advanced less than 1% to settle at $74.38 per barrel, after rising as much as 2.5% on the session. US crude futures still ended the week more than 9% higher, their best week since March 2023.
Brent (BZ=F), the international benchmark price, also rose less than 1% to settle at $78.09 per barrel on Friday.
Oil prices fell session gains after President Biden commented on whether Israel’s retaliation against Iran will include attacking the country’s petroleum infrastructure.
“If I were in their shoes, I would think of other alternatives than attacking oil fields,” Biden told reporters at the White House on Friday afternoon.
Friday’s measures come after a spike of more than 5% on Thursday, when the president responded to the possibility of an attack on Iran’s petroleum infrastructure, which currently produces more than 3 million barrels of crude oil per day.
Asked whether he would support targeting oil facilities, Biden said: “We are discussing that.”
Later in the day, a Pentagon spokesman said at a briefing that the US was talking to Israel about “what a response to Iran would look like” but declined to provide further details on any targets.
Analysts at JPMorgan said Friday morning that the White House is unlikely to favor an attack on Iranian oil facilities as the administration seeks to avoid higher oil prices as the U.S. election is a month away.
“We therefore assume that this will not be Israel’s preferred action, but rather a secondary or even tertiary response to Iran’s potential escalation,” JPMorgan analysts Natasha Kaneva and Prateek Kedia wrote in a note on Friday.
Concerns about possible disruptions along the Middle East’s Strait of Hormuz, a chokepoint for oil shipments, have also pushed prices higher.
“If there is a stranglehold and there is a serious blockage or serious delays, we have to release $80. [Brent]. That will push oil prices up significantly. That is a game changer,” Blue Line Futures founder Bill Baruch told Yahoo Finance this week.
Futures surged higher on Tuesday after Iran fired about 200 ballistic missiles in response to Israeli ground strikes in southern Lebanon targeting Iranian-backed militants.
“The raw form positioning leading up to these events was very short and a lot of this [week’s] The move relates to short positions and not necessarily investors betting on crude oil to continue rising,” Rebecca Babin, senior U.S. energy trader at CIBC Private Wealth, told Yahoo Finance on Friday.
Despite this week’s rise, spare capacity from the OPEC+ oil alliance could keep prices relatively contained.
Last week, the futures market slumped on a report that Saudi Arabia, the leader of the Organization of the Petroleum Exporting Countries, is committed to phasing out voluntary production cuts later this year even if it means lower crude prices .
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.
Click here for an in-depth analysis of the latest stock market news and events affecting stock prices
Read the latest financial and business news from Yahoo Finance
