HOUSTON: Oil prices settled higher on Friday as US Secretary of State Antony Blinken began a week-long sweep through the Middle East in an attempt to contain regional tensions stoked by the Israel-Hamas conflict.
Brent crude futures settled up $1.17, or 1.51%, at $78.76 a barrel. US West Texas Intermediate crude futures finished up $1.62, or 2.24%, at $73.81.
Crude rebounded from losses on Thursday triggered by hefty increases in US gasoline and distillate stocks, and both benchmarks ended the first week of the year higher.
“With the tensions in the Middle East, the geopolitical trading premium has to get pushed higher,” said John Kilduff, partner at Again Capital LLC. “It’s hard for traders to fight the headlines.” Shipping giant Maersk said it will divert all vessels away from the Red Sea for the foreseeable future, warning customers of disruptions. A US government report showing employment grew in December would support demand in the coming year, Kilduff said.
US employers hired more workers than expected in December while raising wages at a solid clip, prompting financial markets to dial back expectations that the Federal Reserve would start cutting interest rates in March.
Non-farm payrolls increased by 216,000 jobs last month, the Labour Department said. Economists polled by Reuters had forecast payrolls rising by 170,000 jobs. “Strong employment should point to strong demand for fuel,” Kilduff said.
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