Oil appears poised to gain modestly as the week closes out, as fears of a regional destabilization in the Middle East have been offset by signs of weakening demand and slightly growing stockpiles.

On Friday, West Texas Intermediate increased to near $84 per barrel, for a gain of about 1% for the week. The surge in price it enjoyed on Monday following the attack by Hamas on Israel, was largely given back over the week as expectations rose the conflict would be contained from the broader Middle East, and most critically, Iran. Additionally OPEC leader Saudi Arabia issued a statement urging peace in a rare high-level diplomatic call to Iran. However with an Israeli ground invasion of Gaza seemingly being prepared, the situation remains volatile.

On Thursday, prices were pushed downward by the biggest increase in US crude stockpiles since February, although the good news was tempered by an additional decline in the vital storage hub in Cushing Oklahoma, where WTI is delivered to. Although oil is seeing record consumption this year, the International Energy Agency has indicated that oil’s retreat from $100 per barrel shows that prices are high enough that it is beginning to experience demand destruction.

It was a volatile week for crude, as traders sought to price in the risks of the Israeli conflict spreading to Iran, the supplies from which are viewed as a crucial crutch against a very tight global market. The Islamic Republic has denied any involvement in the attacks, however the Biden administration has reached in informal understanding with Qatar to wait on distributing $6 billion in oil revenue which Iran had been allowed to access under a previous prisoner swap deal with the United States.

Charu Chanana, market strategist for Saxo Capital Markets Pte in Singapore said, “The key threat to oil will only come if Iran’s involvement is proven. The oil demand outlook also remains muddled.”

On Thursday, the Organization of Petroleum Exporting Countries continued to point to a record oil supply deficit this quarter, noting that this quarter, global inventories will fall by 3 million barrels per day. Supply has been constrained by output cuts implemented by the producer group and its allies, as well as additional cuts by Russia and Saudi Arabia.