• Middle East tensions have caused a slight increase in oil prices, with Brent crude futures climbing to $74.56 a barrel.
• The oil traders are now waiting for Israel's response to a missile attack by Iran on October U.S. and Israeli officials are set to restart talks for a ceasefire and the release of hostages in Gaza.
• The Middle East tensions are also impacting global stock markets, with Indian benchmark indices trading on a flat note.

Oil prices edged higher on Friday, poised for a weekly gain of more than 1% as rising tensions in the Middle East-the world's top oil-producing region-and upcoming Gaza ceasefire negotiations kept traders on alert.

By 0342 GMT, Brent crude futures rose 18 cents, or 0.2%, reaching $74.56 per barrel, while U.S. West Texas Intermediate (WTI) crude increased by 15 cents, or 0.2%, to $70.34 per barrel.

"We continue to believe that $70 is the fair price for crude oil as we await new market drivers, including the outcome of China's NPC Standing Committee meeting and Israel's anticipated response to Iran's October 1 missile strike," noted IG market analyst Tony Sycamore in a briefing, referencing WTI prices.

As the world's top oil-producing region, the Middle East, continues to grapple with escalating tensions, oil prices have seen a slight increase. The prices are on track for a weekly gain of more than 1%, keeping traders on edge as they anticipate the potential outcomes of the ongoing conflicts.

The Middle East tensions have been fluctuating, causing oil prices to settle down 58 cents a barrel in the previous session. The oil traders are now waiting for Israel's response to a missile attack by Iran on October 1. This attack could potentially disrupt oil supplies if it involves hitting Tehran's oil infrastructure. However, reports suggest that Israel would target Iranian military, not nuclear or oil, targets.

Ceasefire Talks Amid Rising Tensions

In the midst of these tensions, U.S. and Israeli officials are set to restart talks for a ceasefire and the release of hostages in Gaza in the coming days. Previous attempts to reach a deal have failed. U.S. Secretary of State Antony Blinken stated that the United States does not want a protracted Israeli campaign in Lebanon, while France has called for a ceasefire and focus on diplomacy.

Sycamore noted that ceasefire talks have a small net negative impact on oil prices, with the focus being more on the conflict in Lebanon and Israel's potential response to Iran. Investors are also eyeing more clarity on Beijing's stimulus policies, although analysts do not expect such measures to provide a major boost to oil demand from China, the world's No. 2 consumer.

Goldman Sachs left its oil, natural gas, and coal price forecasts unchanged, estimating Chinese stimulus boosts to energy prices that are modest relative to bigger drivers such as oil supply from the Middle East and winter weather for natural gas. It forecasts Brent in the $70 to $85 range.

Global Impact of Middle East Tensions

The Middle East tensions are not only affecting oil prices but also impacting global stock markets. Indian benchmark indices, Sensex and Nifty, traded on a flat note following a four-day decline, impacted by lackluster earnings and ongoing foreign outflows. The market was particularly affected by drops in private lender IndusInd Bank and power company NTPC, both of which reported disappointing quarterly results.

In the midst of these tensions, an international conference for Lebanon in Paris raised $1bn in pledges for humanitarian aid and military support. The funding was split 80-20 between aid and the security forces, with the latter aimed at strengthening Lebanon's armed forces so they could deploy in the country's south as part of any potential deal to end the war.

The conference gathered over 70 nations and international organizations, with the US pledging the lion's share - $300m. Germany pledged $104m in humanitarian aid to both Lebanon and neighboring Syria, where displaced people have fled.