By Florence Tan
Oil prices continued to climb on Friday, with a more than $1 increase per barrel helping to offset weekly losses. The surge comes as geopolitical tensions escalate in the Middle East, fueled by reports of Iran’s planned retaliatory strike on Israel from Iraq in the near future.
Crude oil futures, now on the January contract, rose by $1.41, or 2%, to reach $74.22 a barrel by 0456 GMT. Meanwhile, U.S. West Texas Intermediate crude futures saw a $1.46 increase, or 2.1%, reaching $70.72 a barrel after a 0.95% rise in the previous session.
Israeli intelligence sources have indicated that Iran is gearing up to launch an attack on Israel from Iraqi territory, potentially before the upcoming U.S. presidential election on Nov. 5. The attack, as per Axios reports, is expected to involve a significant number of drones and ballistic missiles.
Oil prices have also been buoyed by speculation that OPEC+ may postpone December’s planned production increase by at least a month. According to sources close to the matter, concerns about weak oil demand and growing supply have prompted discussions on delaying the output hike. A decision on this could be made as early as next week.
Despite the recent gains, oil prices are on track to drop by more than 1% for the week, struggling to recover from a significant loss earlier in the week. Analysts remain cautious, with the outcome of the U.S. election and potential fiscal stimulus measures in the spotlight.
On a positive note, manufacturing activity in China has shown signs of growth, with private-sector surveys indicating a rebound in October. This, coupled with unexpected drops in U.S. gasoline stockpiles and crude inventories, has added to the market’s optimism.
The Energy Information Administration reported that the world’s largest oil producer hit a record high of 13.4 million barrels per day in August, highlighting the ongoing challenges and uncertainties in the global oil market.
As tensions in the Middle East and key economic indicators continue to influence oil prices, investors and consumers alike should stay informed and monitor developments closely to make informed decisions about their finances and energy consumption.