Oil Prices Set for Weekly Gain as Middle East Tensions Outweigh Economic Concerns

Oil prices were on track for weekly gains as Middle East tensions supported prices while traders waited for the latest reading on U.S. economic growth amid hopes that central banks would tackle any weakness.

New York-traded West Texas Intermediate crude futures gained 40 cents, or 0.7%, to $56.42 a barrel by 7:42 AM ET (11:42 GMT), while Brent crude futures, the benchmark for oil prices outside the U.S., rose 34 cents, or 0.5%, to $63.73.

U.S crude was on track for weekly gains of 1.2%, while Brent was up 2.0% from a week ago.

Tensions remain high in the Strait of Hormuz, a key gateway for global oil shipping, in the aftermath of Iran’s seizure of a British-flagged tanker last week. Tehran has still refused to release the vessel.

Oil has been supported by the potential threat of military action that could disrupt supply.

Concerns over a global slowdown that could negatively impact demand for oil have limited gains in crude.

The U.S. will release the advanced reading of second-quarter gross domestic product at 8:30 AM ET (12:30 GMT) amid expectations that growth will drop to its slowest pace in more than two years.

But analysts said that the European Central Bank’s indications on Thursday that it was prepared to provide further stimulus in September and expectations that the Federal Reserve will step in with a rate cut next week offered some glimmers of hope for an economic recovery.

“Further global economic data weakness may have limited effects on crude demand as the next round of easing from the ECB, along with the Fed’s shift to an easing cycle, will help to bolster the economy,” said Edward Moya, senior market analyst at OANDA in New York.

In other energy trading, gasoline futures edged forward 0.1% to $1.8813 a gallon by 7:43 AM ET (11:43 GMT), while heating oil rose 0.2% to $1.9175 a gallon.

Lastly, natural gas futures traded down 0.8% to $2.226 per million British thermal unit.

Yahoo Finance

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.