Oil prices fall; set for a positive week on M.east tensions By Investing.com

Investing.com– Oil prices edged lower in early Asian trade on Friday, as stronger-than-expected U.S. inflation data raised some doubts about how much interest rates will fall in coming months.

But prices were set for a second straight week of gains as concerns over supply disruptions in the Middle East kept a risk premium in play. Markets were also tracking Hurricane Milton’s impact on U.S. oil production as the storm tore through Florida.

U.S. crude that expires in December was down 0.5 percent at $78.98 a barrel, while it was down 0.4 percent at $74.79 a barrel by 9:15 p.m. ET (01: 15 GMT).

Strong CPI data lowers betting odds

Oil prices were pressured by some resistance from the dollar as hotter-than-expected US inflation raised concerns about a slower pace of interest rate cuts by the Federal Reserve.

The prospect of US rates staying relatively higher for longer has fueled fears that economic activity will be squeezed, in turn dampening demand in the world’s biggest fuel consumer.

Data showing stronger-than-expected growth in the US added to concerns about slowing demand, although they had limited impact on oil prices this week.

In the US, markets were also watching Hurricane Milton’s impact on oil production, although the storm was seen largely avoiding most oil infrastructure in the Gulf of Mexico.

Oil heads for weekly gain as M.East tensions persist

and WTI futures were set to gain between 1% and 1.8% this week, the second straight week of gains.

Oil markets remained supported by concerns about an escalation in the Israel-Hamas war as hostilities with Hamas and Hezbollah continued.

Israel launched devastating strikes on Hezbollah targets in Lebanon this week, dimming the prospect of a ceasefire, even as reports said the military group was seeking a de-escalation.

Markets fear that an escalation of the conflict – especially if Israel attacks Iranian oil facilities – could disrupt oil supplies in the Middle East.

Elsewhere, it also focused on stimulus measures from China, the main oil importer, after markets were largely underwhelmed by the measures unveiled in late September.

Beijing is set to unveil more fiscal stimulus on Saturday.