Investing
Oil rallied after revisions to US data confirmed that inflation is ebbing, boosting confidence that the Federal Reserve will cut interest rates later this year.
West Texas Intermediate rallied above $77 a barrel. Prices have been buoyed by the S&P 500 reaching record highs, heightened geopolitical risk going into the weekend and crude crossing major moving averages, said Dennis Kissler, senior vice president at Bok Financial Securities Inc.
Oil is heading for a weekly gain after Prime Minister Benjamin Netanyahu’s dismissal of a potential cease-fire in the Israel-Hamas war added bullish impetus to the market. The advance of over 6% this week has also been accompanied by gains in refining margins, indicating tighter fuel markets.
Netanyahu said he sees “no other solution than total victory,” and threats by Iraq to pull support for the American-led coalition added to tensions in the major oil-producing region. Shipping companies also warned that the security situation in the Red Sea continues to deteriorate.
Aiding the firmer outlook for crude this week has been a string of more positive market indicators. In the US, the premium of gasoline over crude increased to the highest since September after nationwide inventories declined. In diesel markets, traders continue to watch Ukrainian drone attacks on Russian refineries, while a fire broke out at another Russian site on Friday.
Meanwhile in Europe, there’s been buying in a key North Sea pricing period, indicating a stronger crude market in the region. That helped push Brent’s prompt spread — a gauge of nearby market health — to its biggest daily gain since October.
