U.S. oil trades near two-month high, heads for third-straight weekly gain on Israel-Hezbollah war fears

Smoke and flame rise after Hezbollah carried out a missile attack on Safed city, northern Israel on June 12, 2024.Anadolu | Anadolu | Getty Images

U.S. crude oil on Friday traded near a two-month high and is on pace for a third-straight weekly gain as fears of war between Israel and the Iran-backed militia Hezbollah grow.

West Texas Intermediate hit an intraday high of $82.72 per barrel, the highest level for the U.S. benchmark since April 30. Brent hit $87.22 per barrel, the global benchmark's highest level in two months.

U.S. oil is up about 1.8% for the week and 6.7% for the month of June.

Here are today's energy prices:

• West Texas Intermediate August contract: $82.10 per barrel, up 36 cents, or 0.46%. Year to date, U.S. oil has gained 14.6%.
• Brent August contract: $86.71 per barrel, up 32 cents, or 0.37%. Year to date, the global benchmark is ahead 12.5%.
• RBOB Gasoline July contract: $2.55 per gallon, up 0.2%. Year to date, gasoline has gained 21.3%.
• Natural Gas August contract: $2.73 per thousand cubic feet, up 1.82%. Year to date, gas is ahead 8.6%.

Oil prices are rising as signs point toward a military conflict between Israel and Hezbollah, stoking fears of a direct confrontation with OPEC member Iran that could disrupt crude supplies, according to RBC Capital Markets.

The Pentagon has moved military assets closer to Lebanon to prepare for evacuating Americans as fighting escalates cross-border fire between Israel and Hezbollah intensifies, three U.S. defense officials told NBC News. The State Department urged U.S. citizens Thursday to strongly reconsider travel to Lebanon.

Hezbollah could target Israel's offshore gas operations if war breaks out, and Israel could seek to hit Iranian oil facilities, according to RBC Capital Markets. There is also a risk that Iran could attack tankers in the straight of Hormuz or abandon a détente with Saudi Arabia and hit the kingdom's oil facilities, according to the firm.

Even if the Iran-Saudi détente holds, "we still would not rule out a risk to regional energy supplies and other important economic assets if the war spreads beyond the current borders," Helima Croft, global head of commodity strategy at RBC, and her team of analysts wrote in a Thursday note to clients.