Oil prices pared gains in early trade on Monday after charting their biggest weekly rise in over a year on Friday amid mounting threats of a region-wide war in the Middle East.
Brent crude futures fell 43 cents, or 0.5%, to $77.62 per barrel by around 0015 GMT. U.S. West Texas Intermediate crude futures slipped 35 cents, or 0.5%, to $74.03 per barrel.
Last week, the Brent contract gained over 8% on a weekly basis and the most in a week since January 2023, while the WTI contract gained 9.1% week-on-week, the most since March 2023.
"Profit-taking might have been the cause of the retreat after the price surge last week," said independent market analyst Tina Teng.
"However, the oil market will likely continue to face upside pressure due to fears of Israel's retaliation response to Iran. Geopolitical tensions are now playing a key role in shaping the market trend."
Israel bombed Hezbollah targets in Lebanon and the Gaza Strip on Sunday ahead of the one-year anniversary of Hamas' Oct. 7 attacks on Israel that triggered war. Its defense minister also said all options were open for retaliation against Iran.
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