Oil Prices End Higher as Holiday Trading and Geopolitical Risks Support the Market

Oil prices closed higher as traders positioned ahead of the U.S. holiday weekend, with lingering geopolitical tensions continuing to underpin sentiment. Caution over developments in the Middle East encouraged buying interest, even as the broader supply outlook limited the scope of gains.

Modest Gains Keep Prices Near Recent Highs

Brent crude ended the session at around $64.09 a barrel, rising about 0.3% on the day, while U.S. crude settled near $59.30 a barrel, also up roughly 0.4%. The moves added to a week that saw prices hover close to multi-week highs, supported by precautionary positioning rather than a decisive shift in fundamentals.

Short-Term Strength, Mixed Medium-Term Picture

Over the past five days, oil prices have gained just over 2%, extending a stronger monthly advance of more than 8%. On a year-to-date basis, prices are modestly higher, reflecting intermittent rallies driven by geopolitical headlines. However, performance over longer horizons remains uneven, highlighting the market’s struggle to sustain momentum amid ample global supply.

Geopolitics Provide Support, Supply Limits the Upside

Concerns about potential disruptions linked to Middle East tensions continue to inject a risk premium into prices, particularly given the strategic importance of key shipping routes. At the same time, expectations of sufficient supply—along with the possibility of additional barrels entering the market from producers facing easing constraints—have kept rallies contained.

Range-Bound Outlook Persists

With no clear signs of a major supply shock or a sharp acceleration in global demand, oil prices appear set to remain range-bound in the near term. Traders are likely to stay sensitive to geopolitical developments and headline risk, especially during periods of thinner liquidity, while underlying fundamentals continue to act as a stabilizing force on the market.