January 05, 2024 (MLN): Oil prices in the international market experienced an uptick on Friday due to increased efforts to prevent the Middle East conflict from escalating, coupled with indications of controlled inflation following the release of minutes from a Federal Reserve meeting.
Brent crude is currently trading at $77.96 per barrel, reflecting a gain of 0.67% on the day.
Meanwhile, West Texas Intermediate crude (WTI) is trading at $72.81 per barrel, up by 0.61% compared to the previous close.
The commodity is on track to end the first week of the year in the green zone, driven by growing concerns about potential supply disruptions.
While the minutes of the Fed meeting did not provide direct clues about when interest rate cuts might commence, the discussions signaled a growing sense that inflation is under control and rising concern about the risks that an "overly restrictive" monetary policy may hold for the economy, as Reuters reported.
Lower interest rates reduce consumer borrowing costs, which can boost economic growth and demand for oil.
Also adding to supply concerns were developments in the Middle East, where Israeli forces are planning a more targeted approach in the north and further pursuit of Hamas leaders in the south, its defense minister said on Thursday.
Aiming to help prevent the conflict from expanding, Blinken was set to travel on Thursday to the Middle East for a week of diplomacy, the State Department said.
U.S. Energy Information Administration data showed gasoline stocks had last week registered their highest week-on-week rise in more than 30 years, while distillate products supplied, a proxy for demand, fell to its lowest level since 1999.
But the bearish data was offset by geopolitical concerns, hopes of economic recovery on potential easing of interest rates, and lingering shipping concerns.
"There is still plenty of tension in the Middle East with Houthi rebels launching a sea drone in the Red Sea, a US airstrike in Baghdad," ING analysts said in a report on Friday.
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Posted on:2024-01-05T11:47:18+05:00
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