Oil Prices Gain Amid Rising Middle East Tensions
Oil Prices Settle Higher Despite Concerns
Oil prices settled higher on Friday, marking a weekly gain as rising tensions in the Middle East continued to stoke fears of potential supply disruptions. This comes at a time when worries about the demand outlook remain elevated.
Prices and Tensions
At 14:30 ET (19.30 GMT), crude oil rose 1.5% to $79.19 per barrel, while the price of oil expiring in April rose 0.6% to $83.35 a barrel.
Middle East Tensions
Concerns about a broader conflict in the Middle East, which accounts for a third of global oil output, remained a major concern as Israel continued its offensive in Rafa, the southern city of Gaza. Meanwhile, Hezbollah chief Hassan Nasrallah vowed to escalate the battle with Israel, further adding to the tensions.
Supply Disruptions and Economic Jitters
Fresh concerns about supply disruptions in the region helped push oil prices higher, offsetting worries about a potential slowdown in economic growth due to a higher for longer interest rate environment in the U.S.
Economic Data and Global Growth
The U.S. producer price index (PPI) increased 0.3% last month, while both China and Japan entered a technical recession in the fourth quarter of 2023, according to GDP data. These developments have further fueled jitters about global growth.
Global Oil Demand and Supply
Amidst these concerns, the International Energy Agency (IEA) reported that global oil demand was slowing, leading to a trim in its 2024 global oil growth forecast. The agency also forecasted higher supplies in 2024, adding to the complexities of the oil market.
The latest developments in the Middle East and their impact on oil prices continue to be a focal point for market participants. The interplay between geopolitical tensions and economic indicators will likely shape the future trajectory of oil prices.
