Oil steadied after its biggest weekly gain in nearly two months as geopolitical risks in Ukraine and the Middle East kept investors on edge.

Brent crude traded above $75 a barrel after surging nearly 6% last week, with West Texas Intermediate nearing $71. Russia's war in Ukraine has escalated with both sides using long-range missiles.

Meanwhile, Iran said it would increase its nuclear fuel production capacity after being criticized by the U.N.'s International Atomic Energy Agency, as OPEC producers brace for potential sanctions under a second Trump administration.

"The IAEA criticism and Iran's response raise the possibility that Trump will seek to impose sanctions on Iran's oil exports when he comes to power," putting at risk about 1 million barrels a day of supply, said Vivek Dhar, an analyst at Commonwealth Bank of Australia. Russian crude flows could also be affected by the escalating war in Ukraine, he said. Oil has traded in a range around $6 a barrel since mid-October — alternating weekly gains and losses — as concerns that geopolitical tensions will affect supply offset expectations of a glut in 2025.

The Organization of the Petroleum Exporting Countries meets later this week to decide on output, and banks including Citigroup Inc. and JPMorgan Chase & Co. are expecting it to delay a planned increase for a third time. Timespreads are bullish, with most spreads widening in backwardation structures toward the end of last week. The three-month Brent spread was at $1.21 a barrel in backwardation on Friday, compared with 70 cents at the start of last week.

Source: Bloomberg