WEB DESK: Global oil prices started the week in a downtrend, extending losses on US jobs data that reduced the likelihood of an immediate interest rate cut in the world’s largest economy.
Brent crude is currently trading at $77.22 a barrel, reflecting a 0.16 percent drop on the day, while West Texas Intermediate (WTI) crude is at $72.21 a barrel, down 0.18 percent from the previous session conclusion.
Both benchmarks posted their biggest weekly declines since October 2023, largely due to concerns about demand despite continued supply disruptions in the market.
Analysts at ING noted that the weakness was partly driven by hopes of a truce between Israel and Hamas, although such a deal does not currently appear imminent.
Investors remain wary of a potential escalation in the Middle East conflict, especially after the US signaled further strikes against Iran-backed groups in response to an attack on US troops in Jordan.
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The US is also continuing its efforts against Houthi rebels in Yemen, whose attacks on shipping vessels have disrupted global oil trade routes, albeit with minimal impact on supplies.
Commonwealth Bank commodities analyst Vivek Dhar suggested that the dominant influence on oil markets would likely come from ceasefire talks between Israel and Hamas, which would reduce tensions in the Middle East and subsequently reduce risks of supply disruptions. That could keep Brent futures below $80 a barrel, he said.
The US Department of Justice has announced sanctions evasion and seizure charges related to an oil smuggling ring that supports Iran’s Islamic Revolutionary Guard Corps. Over 520,000 barrels of sanctioned Iranian oil aboard the crude tanker Abyss were seized in the Yellow Sea en route to China.
In Russia, two Ukrainian attack drones reportedly hit the country’s largest oil refinery in the south, disrupting Russian exports of diesel, a petrochemical feedstock. The 300,000-barrel-per-day Volgograd refinery, owned by Lukoil, confirmed it was operating normally.
In the US, power was restored to BP’s 435,000-barrel-a-day refinery in Whiting, Indiana, at midday on Friday, but the company has not yet set a date for restarting the plant.
