Oil Holds Near Five-Month High With Middle East Tension in Focus

(Bloomberg) — Oil was steady near a five-month high as traders weighed simmering tensions in the Middle East and persistent supply concerns.

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West Texas Intermediate traded below $87 a barrel after closing lower Monday for the first time in seven sessions. Brent also declined. Israeli officials said progress has been made in negotiations for a cease-fire in Gaza, signaling a potential easing of hostilities, but Hamas denied the claim.

The broader outlook remains bullish and some market watchers are talking about $100 oil again after OPEC+ maintained its output cuts. The options market is flashing strength, with the heaviest buying of bullish call options for Brent — which profit when oil prices rise — since 2019.

This week, traders are watching for the release of several key market outlooks. The US Energy Information Administration is scheduled to publish its Short-Term Energy Outlook on Tuesday. That will be followed by reports from OPEC and the International Energy Agency later in the week.

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