Oil Prices Poised for Weekly Gains Despite Friday Dip

Oil prices were on track for a second consecutive week of gains, despite a slight decline on Friday, driven by strong U.S. economic data that fueled optimism about demand in the world’s largest oil-consuming country.

Brent crude futures have risen approximately 1.3% this week, while U.S. West Texas Intermediate (WTI) crude futures have gained around 1.2%.

As of 0650 GMT on Friday, Brent had fallen by 22 cents, or 0.3%, to $80.82 per barrel, while WTI was down 30 cents, or 0.4%, at $77.86 per barrel.

The dip followed a positive reaction to U.S. retail sales data released on Thursday, which exceeded analysts’ expectations. Additionally, a decrease in the number of Americans filing new unemployment claims further bolstered confidence in U.S. economic growth.

“Crude oil reversed recent losses as positive economic data and supply-side concerns boosted investor sentiment,” analysts at ANZ Research noted.

However, oil markets remain focused on geopolitical tensions, particularly following warnings of potential retaliatory attacks from Iran against Israel after the killing of a Hamas leader in Tehran.

Negotiations to secure a ceasefire in the ongoing Gaza conflict began on Thursday and were extended, with talks set to resume in Doha on Friday. Despite these developments, Hamas has boycotted the discussions.

Capping further gains in oil prices, Chinese refineries significantly reduced crude processing rates last month due to weak fuel demand. The Organization of the Petroleum Exporting Countries (OPEC) also lowered its demand outlook for the year on Monday, citing softer expectations for China.