By Adedapo Adesanya
Brent crude neared the $80 per barrel territory on Friday, helped by positive economic data and signals that the United States could cut interest rates as early as September eased demand concerns, while fears of a widening Middle East conflict continue to raise supply risks.
The price of the international crude benchmark went up by 50 cents or 0.6 per cent to $79.66 a barrel and the US West Texas Intermediate (WTI) crude grade rose by 65 cents or 0.9 per cent to $76.84 per barrel.
Meanwhile, both benchmarks rose over 3 per cent in the week, with Brent chalking up more than 3.5 per cent and WTI up by over 4 per cent.
Market analysts noted that for the time being, at least, tensions in the Middle East appear to be a contributing element, and concerns about an intermittent recession have subsided.
A trio of Federal Reserve policymakers indicated on Thursday that they were more confident that inflation is cooling enough to cut rates.
A bigger-than-expected fall in US jobless claims data also helped to underpin the recovery.
The number of Americans filing new applications for unemployment benefits fell more than expected last week, suggesting that fears the labour market is unravelling were overblown and that the gradual softening in the labour market remains intact.
Also offering support was China’s consumer price index, which rose last month at a slightly faster-than-expected rate.
The consumer price index (CPI) in the world’s largest oil importer edged up to a five-month high of 0.5 per cent year-on-year in July, versus a 0.2 per cent rise in June, the Chinese National Bureau of Statistics (NBS) reported on Friday.
On the geopolitical front, the killing last week of senior members of militant groups Hamas and Hezbollah had raised the possibility of retaliatory strikes by Iran against Israel, stoking concerns over oil supply from the world’s largest-producing region.
Leaders of the US, Egypt and Qatar on Thursday called on Israel and Hamas to meet for negotiations on August 15 to finalize a Gaza ceasefire and hostage release deal.
After three days of advances, the Dollar index, which compares the value of the American currency to six others, was down 0.14 per cent at 103.14. A weaker greenback helps demand as oil becomes cheaper for foreign buyers.
Support also came as Libya’s National Oil Corporation implemented a force majeure at its Sharara oilfield due to protests.
However, this week saw a three-fold increase to 485 U.S. oil rigs, a sign of future output.