Oil prices are poised for a weekly gain as bullish sentiment builds

Crude oil prices were on track for a weekly gain earlier today, despite strong headwinds that sent benchmarks lower earlier in the week.

A new round of Israeli airstrikes on Gaza raised the war premium for crude oil again, pushing Brent and WTI higher as the prospect of a ceasefire again moved into the distance.

In the US, better-than-expected unemployment figures quelled concerns about the world’s biggest oil consumer. Interestingly, it was a jobs report that pushed oil prices lower earlier in the week. The July employment report from the Bureau of Labor Statistics showed the unemployment rate rose to 4.3 percent, rekindling recession fears.

“The latest U.S. jobless claims data points to an economy still growing, easing some of the concerns about oil demand,” UBS analyst Giovanni Staunovo told Reuters.

“A recovery in the stock market is also easing some fears of recessionary demand,” BOK Financial Securities senior vice president of trading Dennis Kissler told Bloomberg, also noting expectations of Iranian retaliation against Israel for the attack that killed senior Hamas commander in Tehran.

“It’s going to increase the price of crude oil if there’s a full-scale Iranian crackdown, and I think that’s why everybody’s most worried,” Matador Economics chief economist Tim Snyder told Reuters.

“Crude continued its recovery from the recent decline as heightened geopolitical risks came into focus,” ANZ analyst Daniel Hynes told Reuters, who reported that he expected crude oil prices to post a 3 percent weekly gain today .

The latest weekly figures were apparently enough to allay those fears, helping oil prices rise, with some support from Libya’s production shutdown at the country’s biggest oil field. Sharara was closed earlier this week amid protests.

By Irina Slav for Oilprice.com

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