Oil Prices Fall as Middle East Tensions Ease
Oil prices stumble to second straight weekly loss on easing Middle East tensions
Oil prices fell on Friday, marking a second consecutive weekly loss. The decline was driven by easing concerns about supply disruptions in the Middle East, which overshadowed the boost from a weaker dollar following a disappointing monthly jobs report.
By 2:30 ET (18:30 GMT), futures settled 2.4% lower at $80.51 a barrel, while the contract fell 2.4% to settle at $84.89 a barrel.
Crude dives for second-weekly loss as Middle East risk premium deflates
The two crude benchmarks fell 4% and 6% respectively, marking their second consecutive week in the red. The lack of escalation in the Israel-Hamas war eased worries about supply disruptions in the Middle East.
While Israel continued its major ground assault on Gaza, world powers attempted to broker a cease-fire to provide humanitarian aid to the war-torn region.
Iran called for an oil supply embargo against Israel, but other members of the Organization of Petroleum Exporting Countries disagreed with this proposal.
Dollar slide on weaker monthly jobs report fails to help crude stem losses
Despite a more than 1% fall in the dollar following data showing fewer-than-expected job creations in the US, oil prices were not significantly impacted. This raised doubts about the Federal Reserve resuming rate hikes.
The US economy added 150,000 jobs in the month, down from a revised figure of 297,000 in September and below the expected 180,000.
“Given Powell’s dovish tone at the FOMC meeting this past week and the softness of this data, it is hard to see how the Fed might hike again in December. It is very likely that we already saw the final hike for this cycle in July,” stated Jefferies in a note.
Baker Hughes rig count falls; CFTC data in focus
Oilfield services firm Baker Hughes Co reported that the weekly US rig count fell to 496 from 504.
Traders will be watching the Commodity Futures Trading Commission (CFTC) data release later in the day to gain insight into whether there is a decrease in bullish bets on oil.
Oil prices fell for a second consecutive week as concerns about supply disruptions in the Middle East eased. The decline was driven by a lack of escalation in the Israel-Hamas war, which alleviated worries about potential disruptions to oil supplies. Despite a weaker dollar following a disappointing monthly jobs report, oil prices were not significantly impacted, raising doubts about the Federal Reserve’s plans to resume rate hikes. Additionally, Baker Hughes reported a decrease in the US rig count, further affecting market sentiment. Traders will be closely monitoring the release of the CFTC data to gain further insights into market trends. Overall, the second weekly loss in oil prices reflects the current state of geopolitical tensions and their impact on global oil markets.
