Oil Prices Rise Amid Middle East Tensions

Oil prices increased in Asian trade on Friday, indicating a positive week amid ongoing concerns over escalating conflict in the Middle East.

Tensions in the Middle East

Israel's commitment to retaliate against Iran following a strike in early October has caused traders to remain cautious about potential supply disruptions from the region. Efforts by the U.S. to facilitate a ceasefire have so far shown limited progress.

Price Movements

By 21:04 ET (01:04 GMT), Brent oil futures expiring in December rose 0.4% to $74.70 per barrel, while West Texas Intermediate (WTI) Crude futures increased 0.5% to $70.55 per barrel.

Weekly Gains

Both Brent and WTI futures have seen weekly increases between 1% and 2%, recovering some of the significant losses from earlier in October. However, a larger recovery has been hindered by reports of a higher-than-expected build in U.S. inventories, suggesting more plentiful supplies for the world's leading fuel consumer.

Dollar Influence

The market was also affected by a strong dollar, as persistent concerns about the Federal Reserve's slow interest rate cuts influenced trader sentiment. Oil prices faced volatility amid speculation surrounding the Middle East conflict and U.S. officials' efforts to broker a ceasefire, especially leading up to the 2024 presidential elections that might reshape U.S. policy in the region.

Focus on China Stimulus

Recent declines in oil prices were primarily due to worries over weakening demand from China, the top importer of oil. Despite recent stimulus measures from Beijing, traders have expressed disappointment over the lack of specifics related to the timing and extent of fiscal initiatives.

The Standing Committee of the National People’s Congress is expected to meet in November to outline plans for further fiscal spending, having postponed earlier meetings initially scheduled for October.