People walk past graffiti depicting a Houthi fighter stopping an Israeli ship off the coast of Yemen, painted on a wall of the Saudi embassy in Sanaa, Yemen, on Feb. 15, 2024.

Khaled Abdullah | Reuters

Oil prices have rallied to five-month highs and are on pace for a weekly gain as tensions boil in the Middle East with Israel closing embassies over threats from Iran.

The West Texas Intermediate contract for May delivery rose 32 cents, or 0.37%, to $86.91 a barrel, while the Brent June contract gained 52 cents, or 0.57%, to $91.17 a barrel. U.S. crude is up 4.5% for the week while the global benchmark has added 4.2%.

Israel has closed 28 embassies around the world amid fears of retaliatory strikes from Iran, according to multiple reports in Israeli media. Iran has blamed Israel for a missile strike on its consulate in Damascus that killed a top Iranian general. Israel has not claimed responsibility for the strike.

U.S. crude and Brent entered a “golden cross” this week, which is when the 50-day moving average outpaces the 200-day moving average. Investors typically view a golden cross as an indication of positive momentum and the potential for further upside.

The 50-day moving average for U.S. crude of $79.07 a barrel is slightly outpacing its 200-day moving average of $79.02. Brent’s 50-day moving average is $83.74 a barrel, above the 200-day moving average of $83.54.

WTI crude futures with 50-day and 200-day moving averages.


Tamas Varga, an analyst with oil broker PVM, said the geopolitical temperature has climbed to levels not seen since the Oct. 7 Hamas attack on Israeli civilians.

Oil Prices, Energy News and Analysis

Ukrainian drone strikes on Russian oil infrastructure, meanwhile, have had a material effect on the supply of crude oil and products, Varga said.

“This is the most salient reason behind the rally that has taken the price of front-month Brent from $72/bbl in mid-December above $90/bbl yesterday,” he said.

Crude oil has rallied this year with WTI up nearly 21.2% and Brent up 18.3% on mounting geopolitical tensions and expectations that the market will enter a supply deficit.

Don’t miss these stories from CNBC PRO: