Oil surges over 3%, Brent closes at highest level since July

Oil drelling rigs

Oil prices closed higher today, Oct. 7, extending last week’s strong gains as investors monitored developments in the geopolitical conflict in the Middle East amid concerns over its impact on crude supplies from the region.

Brent crude futures for December delivery rose 3.7%, or $2.88, to $80.93 a barrel—the contract’s highest close since July 13 ($82.36).

West Texas Intermediate (WTI) crude futures for November delivery rose 3.7%, or $2.76, to $77.14 a barrel—the highest settlement since Aug. 12 ($77.37).

Alan Gelder, Vice President of Oil Markets at Wood Mackenzie, told CNBC that the market is currently focused on the possibility of Israel striking Iranian oil facilities, but that is unlikely.

He pointed out that the worst possible scenario for oil prices is tension in the Strait of Hormuz, through which 20% of the world's crude oil exports pass. Any targeting of this strait could have a major impact on prices.

The Houthis in Yemen said they fired two missiles at military targets in the Jaffa area. The announcement came shortly after the Israeli military said it had intercepted a surface-to-surface missile launched from Yemen.