NEW YORK: Oil prices settled higher on Wednesday in a volatile session as investors weighed the chance of supply disruptions from the Iran-Israel conflict and potential direct US involvement.

Brent crude futures settled 25 cents higher at $76.70 a barrel. US West Texas Intermediate crude rose 30 cents at $75.14.

Earlier in the session, prices were down around 2pc. On Tuesday, prices jumped over 4pc.

`The crude markets remain in a wait-and-see mode with the Israeli/Iran conflict still offering an array of question marks that could either spike Brent to as high as $83 per barrel or prompt a plunge back to about the $68area,` analysts at energy advisory firm Ritterbusch and Associates said in a note.

`The biggest fear for the oil market is the shutdown of the Strait of Hormuz, ING analysts said in a note.

`Almost a third of global seaborne oil trade moves through this chokepoint. A significant disruption to these flows would be enough to push prices to $120 (a barrel).

Iran is Opec`s third-largest producer, extracting about 3.3 million barrels per day (bpd) of crude oil.

Iran`s ambassador to the United Nations in Geneva said Tehran has conveyed to Washington that it will respond firmly to the US if it becomes directly involved in Israel`s military campaign.-Reuters