Weekly oil gains due to Middle East tensions and stability

Weekly oil gains due to Middle East tensions and stability

The energy services company Baker Hughes said in its widely followed report on Friday that U.S. energy firms reduced the number of oil and natural gas rigs in activity this week for the second time in three weeks.

At $83.47 a barrel, Brent oil futures settled 61 cents, or 0.74 percent, higher.

Due to geopolitical concerns in the Middle East, oil consumption slowed down, which exceeded the International Energy Agency's projection, and oil prices increased somewhat on Friday.

At $83.47 a barrel, Brent oil futures finished 61 cents, or 0.74 percent, higher. West Texas Intermediate (WTI) oil finished $1.16, or 1.49 percent, higher at $79.19, with Tuesday marking the expiration of its closest March contract. At $78.46, the April contract increased by 87 cents.

Over the course of the week, the U.S. benchmark climbed about 3 percent, while Brent gained over 1 percent.

The likelihood of a wider Middle East war intensifying was driving up the price of crude oil.

In reaction to the death of ten people in southern Lebanon on Thursday—the worst day for Lebanese civilians in four months of cross-border hostilities—Hezbollah claimed it launched dozens of rockets into a village in northern Israel.

According to UBS analyst Giovanni Stanovo, the oil market reacted to the Middle East news in a mild way.

"The market is still receiving oil, and there aren't many disruptions," he said.

According to sources, Israel's campaign against Hamas has left Gaza's biggest operational hospital under siege while airplanes are attacking Rafah, the final remaining Palestinian pocket.

A missile launched from Yemen struck a vessel carrying crude oil headed for India, creating a hazard in the Red Sea.

Concerns about inflation may arise as US producer prices increased more than anticipated in January despite a significant increase in the cost of services. Nevertheless, the drop in retail sales has stoked expectations that the Fed would soon begin to reduce rates, which might boost the market for oil.

"Assumptions of a US rate cut offered support on Thursday, but investors are now modifying their positions in anticipation of the extended US holiday weekend," said Hiroyuki Kikukawa, president of Nissan Securities' NS Trading unit.

The IEA revised down its growth estimate for 2024 on Thursday, citing a slowdown in the rate of increase in the world's oil consumption.

According to the agency, a significant slowdown in Chinese consumption would contribute to a drop in global oil demand growth to 1.22 million barrels per day (bpd) in 2024, or almost half of the rise seen in the previous year. It had previously predicted 1.24 million bpd oil demand increase in 2024.

For the next twenty years, the Organization of the Petroleum Exporting Countries (OPEC) anticipates that oil consumption will rise.

The energy services company Baker Hughes said in its widely followed report on Friday that U.S. energy firms reduced the number of oil and natural gas rigs in action this week for the second time in three weeks.