Oil prices posted weekly gains as prospects for a ceasefire in the war between Israel and Hamas dwindled.
West Texas Intermediate crude rose near $76 a barrel, extending its weekly gain to 6.3%. Prime Minister Benjamin Netanyahu ruled out a possible ceasefire and spoke of a military incursion into southern Gaza, where more than a million people have taken refuge. The military escalation adds new risks to oil flows in a region that produces a third of the world's oil supply.
“Oil prices continue to be heavily influenced by developments in the Middle East, and this appears to be the most important concern,” Fouad Razakzadeh, market analyst at CityIndex and Forex.com, wrote in a note to clients, adding that futures prices are “higher. Not.” volatile.”
Oil prices head for weekly gains as tensions rise in the region
Technical indicators highlight market strength. In the United States, the premium for gasoline rose to its highest level since September as inventories fell across the country. Traders, on the other hand, are following Ukrainian drone strikes on Russian refineries, while another Russian facility caught fire on Friday. The attacks sent diesel futures to their highest level since November, and gas oil futures to their highest level since October.
Rising tensions in the key oil-producing region come as Netanyahu says he “sees no other solution than total victory” and Iraq threatens to withdraw support for the US-led coalition. Meanwhile, Houthi attacks on merchant ships have increased throughout the week, prompting major shipping companies to warn of the continued deterioration of the security situation in the Red Sea.
Shipping company leaders warn that the situation in the Red Sea continues to deteriorate
Meanwhile, the European market saw buying in the North Sea during a key price period, indicating a strong crude market in the region. That helped push the Brent spot spread, which measures near-term market prospects, to its biggest daily increase since October.