As the week comes to a close, oil prices in Asian trade are on the rise, buoyed by persistent concerns over a worsening conflict in the Middle East. Traders are keeping a close eye on the situation as Israel vows to attack Iran following an early-October strike, which could potentially disrupt supplies from the region.
Meanwhile, efforts by the U.S. to broker a ceasefire have so far yielded few results, adding to the uncertainty in the market. Brent crude futures for December delivery are up 0.4% at $74.70 a barrel, while WTI futures have risen 0.5% to $70.55 a barrel.
Oil Set for Weekly Gains
Both Brent and WTI futures are trading up between 1% and 2% this week, recovering from steep losses earlier in October. However, a larger recovery in crude prices has been hindered by data showing a bigger-than-expected build in inventories, indicating less tight supplies in the U.S.
Additionally, a stronger dollar has weighed on oil prices, as concerns over the pace of interest rate cuts by the Federal Reserve persist. This, along with speculation surrounding the Middle East conflict, has led to some volatility in the markets.
China Stimulus in Focus
Recent weakness in oil markets can also be attributed to concerns over slowing demand in China, the world’s top importer. While the country has announced stimulus measures, traders remain skeptical due to a lack of details on the timing and scale of these initiatives.
The upcoming meeting of the Standing Committee of the National People’s Congress in November will be closely watched, as policymakers are expected to decide on plans for more fiscal spending. Originally scheduled for late October, the meeting was delayed, adding to the uncertainty surrounding China’s stimulus efforts.
Overall, the geopolitical tensions in the Middle East, coupled with concerns over demand from China and monetary policy decisions by the Federal Reserve, continue to impact oil prices. Investors should monitor these factors closely to make informed decisions about their portfolios and finances.