Oil Surges 3% on Middle East Fears, US Boost

9 Aug 2024 , 08:17 AM

Oil prices fell in early Asian trading on Friday, but were still on course to gain more than 3% for the week as U.S. jobs data eased demand concerns and fears of a worsening Middle East war remained.

Brent crude futures declined 9 cents, or 0.11%, to $79.07 a barrel. US West Texas Intermediate crude futures were down a penny to $76.09 a barrel.

However, both Brent and WTI were expected to increase more than 3% per week.

Israeli forces increased bombings on the Gaza Strip on Thursday, killing at least 40 Palestinians, according to Palestinian doctors, as Israel prepped for a larger regional conflict.

The execution of prominent members of militant groups Hamas and Hezbollah last week heightened the prospect of Iran retaliating against Israel, raising fears over the world’s largest producing region’s oil supplies.

This week, Iran-aligned Houthi rebels intensified their attacks on international shipping near Yemen in sympathy with Palestinians in the conflict between Israel and Hamas.

The United Kingdom Maritime Trade Operations (UKMTO) agency confirmed on Thursday that it had received a report of an incident on the coast of Mokha, Yemen’s port city.

Libya’s National Oil Corp. declared force majeure at its Sharara oilfield on Wednesday, according to a statement, and the business has gradually curtailed production due to demonstrations.

Prices rose as statistics indicated that the number of Americans filing new unemployment claims declined more than expected last week, implying that fears about the labour market were exaggerated and reducing recession concerns.

The dollar gained in response to the jobs news. A stronger dollar tends to depress oil prices because buyers using foreign currencies must pay more for dollar-denominated petroleum.

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