Oil gains more than a dollar amid Middle East supply concerns

Oil prices rose by more than a dollar on Friday amid concerns about supplies from the Middle East.

According to Reuters, by 0638 GMT, Brent crude futures for December delivery rose $1.32, or 1.5%, to $89.25 per barrel. US West Texas Intermediate crude futures for December delivery also increased $1.29, equivalent to 1.6 percent, to $84.50 per barrel.

However, the two crude oil prices are heading towards recording the first weekly decline in three weeks, as the premium related to geopolitical concerns declined slightly when oil supplies from outside the immediate conflict zone were not affected.

Analysts from Goldman Sachs (NYSE:GS) kept their expectations for the price of Brent in the first quarter of 2024 at $95 per barrel, but added that the decline in Iranian exports may push core prices to rise by about five percent.

They indicated in a note that prices may jump by up to 20% if the least likely possibility occurs, which is the disruption of trade through the Strait of Hormuz, through which 17% of global oil production passes.

Analysts said that the voluntary production cuts from Saudi Arabia and Russia, which will remain in effect until the end of the year, led to a lack of supplies in global markets and supported prices.