Unprecedented Week for Oil Prices: Weekly Gain of Over 3% Amidst Middle East Tensions
By Nicole Jao
(Reuters) – In a rollercoaster week for oil prices, the market saw a surge of over 3% amidst escalating tensions in the Middle East and positive U.S. jobs data.
As of early Asian trading on Friday, oil futures edged down slightly with Brent crude falling 9 cents to $79.07 a barrel, and U.S. West Texas Intermediate crude down a cent at $76.09 per barrel.
Despite the slight dip, both Brent and WTI are poised to end the week with gains of more than 3%.
Israeli forces intensified airstrikes in the Gaza Strip, leading to heightened conflict with Hamas-led militants. The region is on edge as fears of a wider war persist.
Analyst Daniel Hynes noted that oil prices continued their recovery from recent lows as geopolitical risks took center stage. The killing of senior members of Hamas and Hezbollah raised concerns of retaliatory strikes by Iran against Israel, further impacting oil supply from the region.
In Yemen, Iran-aligned Houthi militants carried out attacks on international shipping, adding to the tension in the region. The UK Maritime Trade Operations agency reported an incident near the coast of Mokha, Yemen.
Meanwhile, Libya’s National Oil Corp. declared force majeure at its Sharara oilfield due to protests, leading to a gradual reduction in production.
On a positive note, data showed a decline in new applications for unemployment benefits in the U.S., easing concerns about a weakening labor market and recession fears. The stronger dollar resulting from the jobs data typically leads to lower oil prices, as buyers using other currencies face increased costs for dollar-denominated crude.
Overall, the week was marked by heightened geopolitical tensions and positive economic data, resulting in a significant impact on oil prices. Investors will be closely watching the situation in the Middle East and its implications for global oil markets in the coming weeks.
