Oil prices edged lower during the week ending April 12 amid uncertainty over the timing of the US Federal Reserve’s interest rate cuts, after five-month highs over rising concerns over global oil supply routes in the Middle East.
International benchmark Brent crude traded at $90.75 per barrel at 2.28 p.m. local time (1128 GMT) on Friday, increasing by around 0.5% relative to the closing price of $91.17 a barrel on Friday last week.
West Texas Intermediate (WTI), the American benchmark, traded at $86.13 a barrel at the same time on Friday, for a rise of about 0.9% from last Friday's session that closed at $86.91 per barrel.
Prices started the week on a declining trend over the increasing prospect of a cease-fire between Israel and Hamas after a delegation from the Palestinian group Hamas held discussions on Sunday with the head of Egyptian intelligence in Cairo on efforts to reach a cease-fire in the Gaza Strip and a hostage swap deal with Israel.
Limiting further price declines, Saudi Arabia, recognized globally as the leading exporter of oil, announced an increase in the official selling prices (OSPs) for all its crude grades destined for Asia in May.
This decision comes at a time when the market is experiencing a tightening in the supply of heavy crude oil, aligning closely with market expectations.
However, oil prices spiked on Tuesday as concerns about supply disruptions in the Middle East where the majority of global oil reserves are located, increased over the uncertainty of a cease-fire negotiations.
Three sons of the head of the political bureau of the Palestinian group Hamas, Ismail Haniyeh, along with four of his grandchildren, were killed Wednesday in an Israeli airstrike on a refugee camp in western Gaza City. Prices rose further as this fed concerns for the chances of a cease-fire in Gaza, where over six months of Israeli attacks have left over 33,500 Palestinians killed.
Further, a missile strike on the Iranian Consulate in the Syrian capital, Damascus, resulting in the killing of a top commander of Iran’s Islamic Revolutionary Guard Corps and six other officers, has also exacerbated tensions in the region, where busy energy supply routes are located.
Tensions between Israel and Iran further rose on Wednesday, when Tehran vowed to avenge the attack, while Tel Aviv expressed readiness to retaliate if attacked.
However, data showing that US commercial crude oil inventories and gasoline rose last week indicated low demand, limiting upward oil price movements.
Uncertainty over the timing of the US Federal Reserve’s interest rate cuts combined with statements by Fed officials also put downward pressure on prices.
US consumer inflation figures for March came in higher than estimates, while US producer inflation in March came below market expectations, but accelerated on an annual basis.
The strengthening of the US dollar against other currencies also halts additional price rises by making oil more expensive for foreign currency holders.
By Firdevs Yuksel
Anadolu Agency
energy@aa.com.tr