SINGAPORE: Oil prices were on track to end the week lower as easing concerns over supply disruptions from the Middle East weighed on the market, despite a modest rise in prices on Friday fuelled by stronger US fuel demand during the summer driving season.
Brent crude futures rose 34 cents, or 0.5 per cent, to $68.07 a barrel by 0111 GMT, while US West Texas Intermediate (WTI) crude climbed 33 cents, or 0.51 per cent, to $65.57.
Both benchmarks were set to post a weekly decline of about 12 per cent.
Prices fell earlier in the week after US President Donald Trump announced a ceasefire agreement between Iran and Israel, easing fears of further geopolitical instability in the region. On Tuesday, oil futures touched their lowest levels in over a week following the announcement.
However, prices edged higher on Thursday after US government data showed a drop in crude and fuel inventories, alongside an uptick in refining activity and fuel consumption.
“The market is starting to digest the fact that crude oil inventories are very tight all of a sudden,” said Phil Flynn, senior analyst at Price Futures Group.
Oil also found support from a weakening US dollar, which fell to a three-year low after reports emerged that President Trump was planning to appoint a new Federal Reserve chair sooner than expected. A weaker dollar makes oil cheaper for holders of other currencies, typically boosting demand.
Adding to the easing geopolitical tensions, Israeli Prime Minister Benjamin Netanyahu said shortly before Thursday’s market close that the outcome of Israel’s conflict with Iran could open new paths to peace, a comment that further reduced concerns of prolonged supply risks in the region.
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