On Thursday, oil prices saw a modest rise, recovering some of the more than 1% losses from the prior session due to a significant increase in U.S. crude inventories. Brent crude futures went up by 44 cents, or 0.59%, reaching $75.40, while U.S. West Texas Intermediate (WTI) crude futures rose by 45 cents, or 0.64%, to $71.22. The ongoing conflict between Israel and Hezbollah continues to raise concerns about supply in the market.
Brent is on track for a weekly gain of approximately 3.2%, while WTI is anticipated to increase by around 2.9%. The previous week saw oil prices drop more than 7%, largely due to fears regarding demand from China and decreasing worries about potential disruptions in Middle Eastern oil supplies.
The U.S. Energy Information Administration reported a rise in crude inventories of 5.5 million barrels last week, significantly exceeding analysts’ expectations of a 270,000-barrel increase. Economic activity in the U.S. has remained stable from September to early October, with companies reporting an increase in hiring. This trend reinforces the belief that the Federal Reserve may choose to implement a smaller 25-basis-point interest rate cut in the near future.
Recent stronger-than-expected data on consumer spending, job growth, and inflation has led investors to reassess their expectations for the speed and scale of future U.S. rate cuts.
Furthermore, Israeli airstrikes targeted areas in southern Beirut on Wednesday, and Hezbollah announced its first use of precision-guided missiles against Israeli targets, which has heightened concerns about supply stability. These escalating conflicts coincide with Washington's intensified efforts to broker peace between Israel and Iran-backed groups, including Hezbollah and Hamas, ahead of the U.S. presidential election on November 5, which could have significant implications for U.S. policy in the region.
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Oil prices show a slight increase amid supply concerns, recovering from previous losses. Explore insights on U.S. crude inventories.
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