Crude prices are nearing full recovery from early-week losses, poised for a third consecutive daily gain on Friday amid escalating geopolitical tensions in the Middle East.
A report by Axios on Thursday, citing two Israeli intelligence sources, indicates Iran may be preparing a major retaliatory strike from Iraq within days. Israeli intelligence reportedly anticipates an attack using numerous drones and ballistic missiles launched from Iraq.
Yet, U.S. officials told Axios that they remain uncertain whether Iran has finalized a decision to act.
Iranian Revolutionary Guard Corps commander Hussein Salami warned on Thursday that Iran's response would be beyond any scenario Israel might anticipate.
In parallel, the conflict in Gaza intensified on Friday. Israeli airstrikes in Gaza killed more than 60 Palestinians within the past day, according to local medical sources. Israeli strikes also extended into the southern suburbs of Beirut.
Diplomatic efforts led by the U.S. struggled to make headway.
Market Reaction: West Texas Intermediate (WTI) crude prices, tracked by the United States Oil Fund (NYSE:USO), rose 2.4% on Friday. They reached $71 per barrel marking three days of upward momentum.
Since Wednesday, oil prices rebounded by over 5%. They nearly erased the declines seen earlier in the week caused by subdued attacks from Israel to Tehran.
U.S. energy stocks followed suit, with the Energy Select Sector SPDR Fund (NYSE:XLE) climbing 1%. Notably, Exxon Mobil Corp. (NYSE:XOM) and Chevron Corp. (NYSE:CVX) rose by 0.6% and 3.9%, respectively, following quarterly earnings releases.
While both oil giants topped earnings estimates, Exxon's revenue came in below expectations.
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