Oil traded near a five-month high as investors weighed simmering tensions in the Middle East and persistent supply concerns. Brent was steady above $90 a barrel after closing 0.9% lower on Monday, the first decline in five sessions. West Texas Intermediate was near $86. Israel said progress has been made in negotiations for a cease-fire in Gaza, signaling a potential easing of hostilities, but Hamas denied the claim.

The market is also bracing for Iran’s response to a suspected Israeli attack on its consulate in Syria last week. Hezbollah warned it’s ready for war.

The broader outlook remains bullish and some are talking about $100 oil again as OPEC+ maintains its output cuts. The options market is flashing strength, with the heaviest buying of bullish call options for Brent — which profit when prices rise — since 2019 on Friday. Money managers have also been going increasingly long on the global benchmark.

“The market is pricing in firmer growth and increased geopolitical risks,” Goldman Sachs Group Inc. analysts including Yulia Grigsby and Daan Struyven wrote in a note dated April 8. Most of the recent rally is due to “this increase in speculative positioning and the shift from under-priced timespreads earlier this year to moderate overpricing,” they said.

This week, traders will need to digest a series of reports that will provide a snapshot on the supply and demand outlook, including monthly releases from OPEC and the International Energy Agency.