Oil prices continue upward trend

Oil prices fall for fifth straight session moreextending gains from last week’s peak. The upward trend was attributed to easing fears of a U.S. recession and geopolitical tensions in the Middle East. Brent crude futures rose 70 cents, or 0.9 percent, to $80.36 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 84 cents, or 1.1 percent, to $77.68.

The market is reacting positively to better-than-expected US data last week, which eased recession fears. In addition, concerns about possible Iranian retaliation for the assassinations of key Hamas and Hezbollah leaders are driving prices higher. As one analyst noted, “it seems like a matter of when, not if” Iran will respond.

Geopolitical tensions

Iran and Hezbollah have vowed to retaliate for the killing of Hamas leader Ismail Haniyeh and Hezbollah military commander Fuad Shukr. The market is still waiting for Iran’s response, with many expecting it to come in the near future. Meanwhile, Israel’s incursion into Gaza has intensified, with an airstrike on a school building killing at least 90 people.

The conflict in Ukraine is also playing a role in the rise in oil prices. Russia has evacuated its citizens from parts of a second region adjacent to Ukraine after Kiev increased its military activity near the border. This development has increased tensions between the two countries, contributing to the upward trend in oil prices.

Economic data

Last week, US economic data came in better than expected, easing recession fears. Consumer prices in China rose faster than expected in July, and weekly jobless claims in the US fell more than expected last week. This positive news helped push oil prices higher.

The market is also pricing in a possible rate cut by the Federal Reserve as soon as next month, and three central bankers said last week that inflation appears to be cooling enough for such a move. These developments have combined to push oil prices higher, with Brent crude up 3.7 percent and WTI crude up 4.5 percent over the past week.

Oil prices are expected to continue rising in the coming days, depending on a combination of geopolitical tensions and positive economic data.

Main fast food

• Oil prices rose for the fifth consecutive session.
• Declining fears of a US economic recession and geopolitical tensions are pushing prices higher.
• The market is expecting a possible interest rate cut by the Federal Reserve.

If you want access to all articles, take advantage of our special promotion and subscribe here!