Oil Prices Head for Weekly Gains Amid Middle East Escalation

Oil prices are set to rise for the week as concerns about disrupted energy flows in the Red Sea and fears of further escalation in the US-Israeli conflict with Iran weigh on markets.

Brent futures fell $1.82, or 1.81%, to $98.87 a barrel at 0747 GMT after Iran-aligned Houthis struck two Saudi oil tankers in the Red Sea, but remain on course for a 12% advance this week.

The contract had settled up 7% above $100 in the previous session, its highest since May. West Texas Intermediate (WTI) futures were down $1.60 or 1.74% at $90.59 a barrel, on track for a 9.7% weekly rise.

PVM Oil Associates analyst John Evans said 'major hubs of oil production or supply routes are surrounded by war,' and that the short-term outlook is bullish due to the US President's promise of 'major military punishment' for Iran and its allies after the strikes in the Red Sea.