Oil Prices Rise Amid Middle East Tensions, Set for Weekly Gains

Oil prices increased during Friday’s Asian trading session, driven by concerns over escalating conflict in the Middle East. Israel's vow to strike Iran following an early-October attack has kept traders on edge, maintaining a risk premium in the market.

Israel-Iran Conflict Fuels Market Volatility

The heightened tensions in the Middle East have stirred fears of potential disruptions in global oil supply, particularly from key producers in the region. Traders are closely watching for any developments that could impact the oil flow. U.S. efforts to broker a ceasefire have made limited progress, adding to the uncertainty.

Brent and WTI Futures Poised for Weekly Gains

Brent crude futures for December delivery rose by 0.4%, reaching $74.70 a barrel, while West Texas Intermediate (WTI) crude climbed 0.5% to $70.55 per barrel. Both benchmarks are on track to close the week with gains of 1% to 2%, rebounding from the sharp losses seen earlier in October.

However, the recovery in oil prices was tempered by a larger-than-expected build in U.S. crude inventories, signaling that supply in the world’s largest fuel consumer remains robust. Additionally, a strong U.S. dollar, driven by expectations of fewer Federal Reserve rate cuts, weighed on crude demand.

China Stimulus Measures in Focus

Traders remain cautious over slowing oil demand in China, the world’s top importer. Despite a series of stimulus announcements, optimism has been limited due to a lack of clear details from Beijing. The upcoming November meeting of the Standing Committee of the National People’s Congress is expected to provide more insights on future fiscal policies.