Oil remains near the highest this year as Middle East tensions stoke bullishness

Oil edged lower, but remained near the highest level this year as persistent tensions in the Middle East added a risk premium to the market.

Brent crude traded near $83 a barrel after rallying 8% over the past two weeks, while West Texas Intermediate was close to $79.

Qatar said negotiations aimed at securing an Israel-Hamas cease-fire and the release of hostages haven’t progressed as hoped, while Israel warned it could launch a ground offensive in the Rafah area of Gaza as early as mid-March.

The ratcheting up of geopolitical risks in a region that’s the source of around a third of the world’s is supporting prices, with bullish wagers for global benchmark Brent at the highest since 2021. A holiday in the US will likely reduce trading on Monday, although that could be partially offset by the reopening of Chinese markets after the weeklong Lunar New Year holidays.

Brent for April settlement fell 0.4% to $83.16 a barrel at 7:53 AM in Singapore.

WTI for March delivery declined 0.2% to $79.03 a barrel.