Oil prices experienced an uptick on Friday, with the week poised to end on a modestly higher note, as discussions surrounding a potential ceasefire in Gaza faced added complexities following the tragic deaths of over 100 Palestinians awaiting aid deliveries.
In the early hours of Friday, Brent futures for April delivery climbed 29 cents to reach $82.20 a barrel, while U.S. West Texas Intermediate (WTI) saw a 0.3% increase to $78.48.
WTI is tracking towards a 4% gain for the week, while Brent remains steady near last week’s settlement price. Brent has maintained its position above the $80 threshold for three consecutive weeks, with the conflict in the Middle East having a limited impact on crude flows despite incidents of attacks on shipping traffic in the Red Sea.
President Joe Biden expressed concern over reports of Israeli troops firing upon individuals awaiting food aid in Gaza, emphasizing that the tragic event could complicate ceasefire discussions. Israel attributed the deaths to the surrounding crowds near aid trucks, citing incidents of trampling or being run over.
Amidst the escalating tensions, talks between Israel and Hamas in Qatar to negotiate a 40-day truce in the Gaza conflict have hit a roadblock, with no significant breakthrough reported by Qatari mediators. The unresolved contentious issues continue to hinder progress in reaching a consensus.
In other developments, China’s official factory survey revealed that manufacturing activity contracted for the fifth consecutive month in February, prompting calls for additional stimulus measures from Beijing to support struggling factory owners amid order challenges.
Additionally, the U.S. Federal Reserve’s PCE index indicated January inflation in line with economists’ projections, maintaining the possibility of an interest rate adjustment in June.
On the supply front, a recent survey disclosed that the Organization of the Petroleum Exporting Countries (OPEC) increased its output to 26.42 million barrels per day (bpd) this month, with Libyan production rising by 150,000 bpd compared to the previous month.
Looking ahead, a consensus among 40 economists and analysts anticipates an average price of $81.13 per barrel for the front-month contract throughout this year.