Oil rises as investors weigh renewed U.S.-Iran conflict risk after midterms
Brent climbed 1.67% to $99.90 and WTI gained 1.43% to $91.69 as analysts weighed escalation risk against a reported Iranian nuclear proposal sent via Qatar.
At a glance
- Brent crude futures rose 1.67% to $99.90 a barrel and WTI gained 1.43% to $91.69 on Friday as investors weighed U.S.-Iran risks.
- Rapidan Energy Group's Bob McNally sees an 80% probability of renewed U.S.-Iran military fighting and expects both benchmarks above $100.
- Iran reportedly sent a nuclear proposal to Washington through Qatar, Reuters reported, citing a senior Iranian official.
Oil prices rose on Friday as investors weighed the risk of renewed military escalation between the United States and Iran following the midterm elections, alongside the prospect of a diplomatic breakthrough.
Brent crude futures climbed 1.67% to $99.90 a barrel, while U.S. West Texas Intermediate crude futures gained 1.43% to $91.69 a barrel.
Investors are assessing whether the conclusion of the U.S. midterm elections could clear the way for renewed action against Iran, potentially threatening oil supplies from the Middle East.
Analysts see 80% chance of fighting resuming
Bob McNally, founder and president of Rapidan Energy Group, told CNBC's "Squawk Box Asia" that he sees an 80% probability of military fighting resuming, and forecast that both oil benchmarks could climb above $100 a barrel.
McNally said President Donald Trump is determined, as a legacy item and almost at all costs, to prevent Iran from getting a nuclear weapon and to have it give up its nuclear capabilities. Iran, he said, is not willing to do so, and as long as that core difference is unresolved, "the escalation dynamic remains in place."
Other analysts share that view, including Lombard Odier chief economist Samy Chaar and head of investment strategy Luca Bindelli, according to the report.
A diplomatic opening
Hopes for a diplomatic resolution have also emerged. Reuters reported, citing a senior Iranian official, that Iran has sent a nuclear proposal to Washington through Qatar.
Tanker attacks continue
Iran reported three additional attacks on oil tankers in the Strait of Hormuz on Thursday. Data from the UK Maritime Trade Operations (UKMTO) indicated that attacks on vessels were continuing at a near-record rate.
CNBC's Lim Hui Jie contributed to the report.
Source: CNBC.
Questions and answers
- Why did oil prices rise?
- Prices rose as investors weighed the risk of renewed U.S.-Iran military escalation after the midterm elections, alongside the prospect of a diplomatic breakthrough.
- What are analysts saying about the chance of renewed U.S.-Iran conflict?
- Bob McNally, founder and president of Rapidan Energy Group, puts the probability of military fighting resuming at 80% and forecasts Brent and WTI could climb above $100 a barrel.
- What is happening in the Strait of Hormuz?
- Iran reported three more attacks on oil tankers in the Strait of Hormuz on Thursday, and UK Maritime Trade Operations data showed attacks on vessels continuing at a near-record rate.
