Crude oil prices were stuck in something of a holding pattern on Friday as the needle for geopolitical risk spins with no clear direction.

Crude oil prices have been elevated for much of the year on the back of heightened geopolitical risk, from a Saudi-Iran proxy war in Yemen to multilateral skirmishes in the Syrian civil war. That risk was most pronounced on Tuesday when U.S. President Donald Trump pulled out of the multilateral Iranian nuclear agreement.

After slumping before the announcement, crude oil prices jumped more than 3 percent on Wednesday, but have since been in a relative holding pattern. Ole Hansen, the head of commodity strategy at Danish investment firm Saxo Bank, said in response to questions sent by UPI that Brent crude oil may be moving in the range of $71 to $82 per barrel.

"Without a further escalation between Israel and Iran one would assume that the market may struggle to make further gains in the short term," he said. "Selling into a live geopolitical situation requires quite a bit of nerve and has yet to emerge."

Israeli forces on Thursday hit Iran's military structure in Syria, including a logistics headquarters belonging to Iran's Quds Force near Damascus International Airport. Iran's government responded Friday that it would back Syria's "right to defend itself."

The price for Brent crude oil, the global benchmark, was down 0.25 percent as of 9:16 a.m. EDT to $77.28 per barrel. West Texas Intermediate, the U.S. benchmark, was down 0.2 percent to $71.22 per barrel.

Apart from a geopolitical risk premium, the price of crude oil was supported this week by drains in U.S. inventory levels as reported by the U.S. Energy Information Administration. A mid-week assessment from Geoffrey Craig, the oil futures editor at S&P Global Platts, said markets could be ready for a sell-off after the Trump-triggered peak for the week unless the gap between supply and demand is shrinking.

"Recent EIA data has been price supportive," he said.

The price for oil may move later in the day when Baker Hughes issues its weekly rig count figures. A possible indication of future production trends, a gain, particularly in the United States, could send the price for oil lower.

Texas regulators reported that rig activity in the state is up 30 percent from last year.

Oil prices moderate after initial Iranian response
Washington (UPI) May 10, 2018 -Crude oil prices tried to continue their upward trajectory Thursday on actual and future supply drawdowns, but trends were offset by tepid U.S. consumer prices.

A decision Tuesday from U.S. President Donald Trump to back out of the Iranian nuclear deal may put the global oil market in a deficit. The concerns were to such a degree that the International Energy Agency said it may act should the situation warrant a coordinated move. In 2011, parties to the IEA, which include the United States, pulled oil out of strategic reserves because of Libyan outages.

Swiss financial services company UBS said it was shifting its posture from "sideways" to bullish and put its target range for crude oil at $85 per barrel at the high end.

"With supply risks already high in Venezuela, where oil production has been in free fall, the oil market is likely to remain in deficit this year," the emailed market report read.

After rallying more than 3 percent in the previous session, the price for oil was cooling off early Thursday. The price for Brent crude oil was down 0.1 percent to $77.13 per barrel as of 9:15 a.m. EDT. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.11 percent to $71.22 per barrel.

This week's rally in crude oil prices may be a knee-jerk reaction to the U.S. move out of the Iranian deal. The language of the sanctions legislation outlines a 180-day window, meaning it's too soon for Iranian oil flows to be limited in real terms. Analysis from commodity pricing group S&P Global Platts found there may be some "wiggle room" given the nature of the U.S. decision.

In the United States, the world's leading economy, the cost of consumer goods rose less than expected, even though items like gasoline continue to gain in price. The cost of all items, save for food and energy, rose 0.1 percent last month, compared with 0.3 percent in January.

New and used vehicles led the decline in the United States, the world's leading economy. But fuel prices, spurred on by a steady streak of higher oil prices, continued to accelerate. Gasoline prices for the 12 months ending in April, meanwhile, are up 13.4 percent.

Gasoline prices may be approaching $3 per gallon on average, a psychological point that could trigger a change in consumer habits. Elsewhere, the U.S. Labor Department reported hourly earnings for all employees were static from March to April.

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Texas rig activity up by more than 30 percent
Washington (UPI) May 11, 2018
Already home to about half of all the rig activity in the country, the Texas state government reported drilling permits jumped more than 30 percent. Texas is the No. 1 oil producer in the country. Total crude oil production for all of last year was around 1.2 billion barrels, up 3.3 percent from full-year 2016. According to Baker Hughes, the state accounts for about 50 percent of all rig activity in the country. Baker Hughes provides a weekly rig count, which serves as a loose barometer ... read more