Oil extends gains on reports Iran preparing to strike at Israel

Cuba-flagged oil tanker Vilma carrying about 400,000 barrels of oil leaves Mexico’s Pajarito’s port on its way to Cuba, in Pajaritos, Mexico October 26, 2024. REUTERS Keywords: oil, gain, price, OPEC, Iran, Israel, strike, US, West Texas, crude, futures

Oil prices extended gains in early Asian trade on Friday, following reports that Iran was preparing a retaliatory strike on Israel from Iraqi territory in the coming days.

US West Texas Intermediate crude futures rose $1.24, or 1.8%, to $70.50 a barrel by 2229 GMT after settling up 0.95% in the previous session.

Brent crude , which will roll to the January contract, has yet to start trading. The December contract which expired on Thursday closed 0.85% higher at $73.17.

Israeli intelligence suggests Iran is preparing to attack Israel from Iraqi territory in the coming days, possibly before the US presidential election on Nov 5, Axios reported on Thursday, citing two unidentified Israeli sources.

The attack is expected to be carried out from Iraq using a large number of drones and ballistic missiles, the Axios report added. The report said that carrying out the attack through pro-Iran militias in Iraq could be an attempt by Tehran to avoid another Israeli attack against strategic targets in Iran.

Oil prices were also supported by expectations that OPEC+ could delay December's planned increase to oil production by a month or more, four sources close to the matter told Reuters on Wednesday, citing concern about soft oil demand and rising supply.