Oil prices up following strong demand, Middle East strife

By Basak Erkalan

Oil prices increased on Friday due to strong US demand and rising tensions in the Middle East.

International benchmark Brent crude traded at $89.66 per barrel at 10.36 a.m. local time (0736 GMT), a 0.7% increase from the closing price of $89.01 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $84.05 per barrel at the same time, a 0.6% increase from the previous session that closed at $83.57 per barrel.

The US, the world's largest oil-consuming country, showed robust demand when the US Energy Information Administration (EIA) announced on Thursday that commercial crude oil stocks had decreased by approximately 6.4 million barrels to 453.6 million barrels last week.

Plus, concerns over the ongoing conflict in the Red Sea flagged supply risks and propped prices up.

Yemen’s Houthi group stated Friday that they carried out attacks targeting an Israeli vessel and multiple sites in the southern Israeli city of Eilat.

The group's military spokesperson, Yahya Saree, said in a televised speech that their forces successfully targeted the Israeli ship MSC Darwin using missiles and unmanned aerial vehicles (UAVs) in the Gulf of Aden.

Additionally, uncertainties over when the US Federal Reserve (Fed) will start interest rate cuts continue to influence oil prices.

The possibility of a rate cut limited upward price movements, as generally high interest rates boost the value of the US dollar, making oil more expensive for holders of other currencies.