Oil Holds Near Five-Month High as Traders Focus on Middle East

Oil traded near a five-month high as investors weighed simmering tensions in the Middle East and as energy traders struck a bullish note at a conference in Europe, Bloomberg reported.

Brent was steady above $90 a barrel after closing 0.9% lower on Monday, the first decline in five sessions. Israel said progress has been made in negotiations for a cease-fire in Gaza.

Vitol Group’s chief executive officer said at the Financial Times Commodities Global Summit on Tuesday that prices are likely to trade in a $80 to $100 range this year, and the company expects a similar level of demand growth to last year. Gunvor Group’s global head of research also said that expectations around demand had grown, echoing comments from Trafigura Group a day earlier.

The broader outlook remains bullish and some are talking about $100 oil again as OPEC+ maintains its output cuts. The options market is flashing strength, with the heaviest buying of bullish call options for Brent — which profit when prices rise — since 2019 on Friday and another day of frenzied trading Monday. Money managers have also been going increasingly long on the global benchmark.

“The rally in recent weeks has partially been supported by positive fundamental news,” Morgan Stanley analysts including Martijn Rats and Charlotte Firkins wrote in a note in which the bank upgraded its forecasts for this year.

This week, traders will need to digest a series of reports that will provide a snapshot on the supply and demand outlook, including monthly releases from OPEC and the International Energy Agency.