Oil heads for weekly losses as Mideast worries ease, China demand uncertain
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Oil prices were little changed on Friday, but headed for a second week of losses as supply concerns driven by conflict in the Middle East eased, while the demand outlook from the world’s top crude importer China remained uncertain.
Brent crude futures rose 34 cents, or 0.4%, to $87.19 a barrel at 0735 GMT, while U.S. West Texas Intermediate crude futures gained 41 cents, or 0.5%, to $82.87 a barrel.
“Oil prices have managed to ride on the improved risk environment higher, as markets continue to bask in the hopes that the Fed is likely done with its rate hiking process,” said Yeap Jun Rong, market strategist at IG.
“Nevertheless, there are still some reservations around oil demand outlook this week as China’s PMI did not provide much conviction of a demand revival in place,” Yeap added.
China’s manufacturing activity unexpectedly contracted in October. The official purchasing managers’ index (PMI) fell to 49.5 in October from 50.2, dipping back below the 50-point level demarcating contraction from expansion, data from the National Bureau of Statistics showed on Wednesday.
On Friday, a private sector survey showed China’s services activity expanded at a slightly faster pace in October, but sales grew at the softest rate in 10 months and employment stagnated as business confidence waned.
Meanwhile, geopolitical concerns remained in focus, as Israeli forces on Thursday encircled Gaza City – the Gaza Strip’s main city – in their assault on Hamas, its military said, but the Palestinian militant group resisted their drive with hit-and-run attacks from underground tunnels.
The White House said it was exploring a series of pauses in the Israel-Hamas conflict to help people safely exit Gaza and allow humanitarian aid to get in.
This report’s information was first seen on REUTERS; to read more, click this link.
