Oil down 3% on week, racing from one war headline to another
Investing.com - Oil ended one of its most volatile weeks for the year with a 3% loss as traders raced from one headline to another on the Middle East conflict that brought warring parties Israel and Hamas no closer to a solution despite intense mediation by the United States and other global powers.
An official of the militant Hamas group conditioned the release of hostages in Gaza on a ceasefire in Israel's bombardment of the Palestinian enclave, Reuters reported. Israel says it is preparing a ground invasion, but has been urged by the US and Arab countries to delay an operation that would multiply the number of civilian casualties in the densely populated coastal strip and might ignite a wider conflict.
“It’s a ‘mess’, in one word,” John Kilduff, partner at New York energy hedge fund Again Capital, said, referring to the war. “No oil trader, I can tell you, knows where this thing is heading and everyone is just racing from headline to another.”
“It’s a field day for vol’ traders though,” he said, using the abbreviation for volatility.
New York-traded West Texas Intermediate, or WTI, crude for December delivery, settled Friday’s session at $85.54, up $2.33, or 2.8%. The US crude benchmark had been in yo-yo mode over the past four days, rising 2% or more in one session to promptly give that back in the next. For the week, WTI finished down 3.6%.
As WTI settled, UK-origin Brent crude for December delivery settled at $90.48, up $2.55, or 2.9%. For the week, the global crude benchmark showed a drop of nearly 2%.
Crude prices regained their upward momentum after Thursday’s tumble as Israeli forces carried out their biggest Gaza ground attack on Hamas overnight, with Prime Minister Benjamin Netanyahu saying Israeli troops were still preparing for a full ground invasion.
While that was being held up amid intense mediation by world powers, the threat of fifth largest oil producer Iran thrusting itself into the battle seemed to intensify with each passing day of the three-week old war.
Tehran, a vociferous supporter of Hamas, has constantly baited Israel ally Washington since the deadly Hamas rampage into southern Israel on Oct. 7 that triggered the worst fighting the Middle East has seen in decades. U.S military struck Iranian targets in Syria on Friday and Iranian Foreign Minister Hossein Amirabdollahian warned that the United States will "not be spared from this fire".
Separately, projectiles hit two Egyptian Red Sea towns on Friday injuring several people, sources and officials said, showing the risk of regional spillover from the conflict.
(Peter Nurse and Ambar Warrick contributed to this item)
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