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  • Brent oil is gaining ground on heightened tensions in the middle east. 
  • US missile strike at Baghdad airport has introduced geopolitical risk into the market. 

The bid tone around Brent oil strengthened, pushing prices higher from $66.20 to $66.90 on renewed tensions in the middle east and heightened prospects for supply disruptions in the region.

Iraqi TV and three Iraqi officials said Friday that Iranian Gen. Qassim Soleimani, the head of Iran’s elite Quds Force and Abu Mahdi al-Muhandis, the deputy commander of Iran-backed militias known as the Popular Mobilization Forces have been killed in a US missile strike at Baghdad’s international airport.

The missile attack has come after a New Year’s Eve aggression by Iran-backed militias on the US Embassy in Baghdad. The strike at Baghdad airport has been confirmed by US officials.

The violent confrontation has introduced a certain geopolitical risk and is pushing oil higher.

Iraq is at high risk for oil supply disruptions this year, following a flare-up in tensions between the US and Iran-backed militia groups in the country, warned analysts at RBC Capital Markets in a Thursday note, according to Market Watch.

So, if the US-Iran tensions escalate further, oil could challenge recent highs near $66.38.

Teasing weekly loss

Despite the Asian session gains, Brent oil is still down 1.95% on a week-to-date basis. A weekly close in the red would end a four-week winning trend.

The benchmark rallied by nearly 22% in 2019 to register its biggest annual gain since 2016.

Technical levels