Oil prices fluctuate as concerns mount over Middle East tensions

Oil prices rose above $91 a barrel Monday as diplomatic efforts to address the crisis in the Middle East intensified, but slipped back later in the day, falling below $90 on reports that that US was nearing a deal to ease sanctions on Venezuela.

Prices dropped on Monday afternoon after the Washington Post reported that the United States and Venezuela had agreed to a deal that would ease restrictions on Venezuela's oil industry in exchange for a freer presidential election in the country next year.

Brent crude futures, the international oil benchmark, rose as high as $91 a barrel in Asian hours Monday, up slightly from Friday's settlement price of $90.89. They were last trading at $89.65 a barrel.

West Texas Intermediate, the US benchmark, briefly rose to $87.98, compared with Friday's closing price of $87.68. It was last trading at $86.50.

Still, investors are concerned the Israel-Hamas war could spark a wider conflict in the oil-rich region and further tighten global oil supply.

Both futures had surged Friday, after Israel's military warned more than 1 million people to leave northern Gaza, triggering worries about a potential ground offensive by Israel in retaliation for terror attacks by Hamas that killed at least 1,400 people.

Speaking to CBS Sunday, US National Security Adviser Jake Sullivan said that, while there was no new intelligence that the threat level from Iran had changed, "there is a risk of an escalation of this conflict."