By Georgina McCartney
HOUSTON (Reuters) -Oil prices extended gains after settlement on Thursday, rising by more than $2 per barrel on a report that Iran is preparing to attack Israel from Iraqi territory in the coming days.
WTI crude oil futures jumped $2.15 or 3.13% to $70.76 after settlement at 3:22 p.m. EDT, and Brent futures for January delivery jumped by $2.10 or 2.91% to $74.26.
Brent crude futures settled up 61 cents, or 0.84%, to $73.16 a barrel. Brent futures for December delivery expired on Thursday. The more actively traded January contract settled at $72.81. WTI futures settled up 65 cents, or 0.95%, at $69.26.
Israeli intelligence suggests Iran is preparing to attack Israel from Iraqi territory in the coming days, possibly before the U.S. presidential election on Nov. 5, Axios reported on Thursday, citing two unidentified Israeli sources.
The attack is expected to be carried out from Iraq using a large number of drones and ballistic missiles, the Axios report added. The report said that carrying out the attack through pro-Iran militias in Iraq could be an attempt by Tehran to avoid another Israeli attack against strategic targets in Iran.
“This is putting back on the table the possibility that Israel may give an attack on Iran another go,” said Phil Flynn, senior analyst at Price Futures Group, warning that Iranian infrastructure may not be off-limits in an attack.
Iran is an OPEC member with production of around 3.2 million barrels per day or 3% of global output.
The week began with a large selloff with Brent and WTI futures falling more than 6% on Monday after Israel showed some restraint in its retaliatory attacks on Iran over the weekend.
The possibility that OPEC+ would delay a planned oil output increase also supported prices on Thursday.
A decision could come as early as next week, Reuters reported. OPEC+ is scheduled to meet on Dec. 1 to decide its next policy steps.
In China, the world's biggest oil importer, manufacturing activity expanded in October for the first time in six months, suggesting stimulus measures are having an effect.
"Several international events have converged at the turn of the month that could see oil markets in for a bumpy ride in early November," said Rystad Energy's Sahdev, citing the U.S. election, a continually weak Chinese demand outlook, OPEC+ uncertainty and the war in the Middle East.