2023.10.1319:15:00UTC+00Oil Futures Settle Sharply Higher On Geopolitical Tensions

Oil prices rose sharply on Friday amid rising concerns about the potential impact of the ongoing Israel - Hamas war on global crude supplies.

Israel's military today called for all civilians of Gaza City, more than 1 million people, to relocate south within 24 hours.

The Israeli military said it would operate "significantly" in Gaza City in the coming days and civilians would only be able to return when another announcement was made.

The United States' decision to tighten sanctions against Russian crude exports has also raised supply concerns.

The U.S. Treasury Department said that it has imposed its first set of sanctions on two companies that shipped Russian oil in violation of a multinational price cap of $60 a barrel.

Russia is the world's second-largest oil producer and it is feared that the new sanctions could tighten global supply.

West Texas Intermediate Crude oil futures for November ended higher by $4.78 or about 5.8% at $87.69 a barrel. WTI crude futures gained about 6% in the week.

Brent crude futures for December settled at $90.89 a barrel, gaining $4.89 or about 5.7%.

Baker Hughes said today that the number of active rigs drilling for oil in the U.S. rose by 4 to 501 this week.

"Crude prices are surging as the oil market will remain very tight given escalating geopolitical risks could threaten supplies and after banks continue to describe the US economy as resilient," says Edward Moya, Senior Market Analyst at OANDA.