Oil reports second straight weekly gain on Israel-Hamas concerns; Brent settles lower at $92/bbl | Mint
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Business News/ Markets / Commodities/  Oil reports second straight weekly gain on Israel-Hamas concerns; Brent settles lower at $92/bbl
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Oil reports second straight weekly gain on Israel-Hamas concerns; Brent settles lower at $92/bbl

Both Brent crude and US WTI had gained more than a dollar per barrel during Friday's session on signs of escalation of the conflict. For the week, both front-month contracts rose over 1 per cent, a second straight weekly jump.

(FILES) Brent crude futures fell 22 cents, or 0.2 per cent, to settle at $92.16 a barrel. (Photo by Katie SCHUBAUER / AFP) (AFP)Premium
(FILES) Brent crude futures fell 22 cents, or 0.2 per cent, to settle at $92.16 a barrel. (Photo by Katie SCHUBAUER / AFP) (AFP)

Oil prices settled lower on Friday, October 20, after the Islamist group Hamas released two US hostages from Gaza, leading to hopes the Israeli-Palestinian crisis could de-escalate without engulfing the rest of the Middle East region and disrupting oil supplies. Hamas' armed wing released the two US hostages from Gaza - a mother and her daughter on Friday - for humanitarian reasons in response to the Qatari mediation efforts in the war with Israel, according to reports.

Brent crude futures fell 22 cents, or 0.2 per cent, to settle at $92.16 a barrel. US West Texas Intermediate crude futures for November delivery, which expired after settlement on Friday, fell 62 cents, or 0.7 per cent, to $88.75 a barrel. The more-active December WTI contract closed 29 cents lower at $88.08 a barrel. 

Both contracts had gained more than a dollar per barrel during the session on signs of escalation of the conflict. For the week, both front-month contracts rose over 1 per cent, a second straight weekly jump, according to news agency Reuters.

Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for a November 17 expiry, settled 0.37 per cent higher at 7,357 per bbl, having swung between 7,317 and 7,474 per bbl during the session so far, against a previous close of 7,330 per barrel.

Also Read: Indian crude basket to average $87/bbl, OMCs to bear the brunt as oil surges 6% over Israel-Hamas war

What's supporting crude oil prices?

-Supporting oil prices were wide forecasts of a tightening market in the fourth quarter after top producers Saudi Arabia and Russia extended supply cuts of around 1.3 million barrels per day (bpd) till the end of the year.

-UBS expects Brent prices to trade in the $90 to $100 a barrel range over the coming sessions. Money managers cut their net long US crude futures and options positions by 56,850 contracts to 183,351 in the week to October 17, as the US Commodity Futures Trading Commission (CFTC).

‘’There have been drone attacks against US bases in Iraq and Syria, while an American destroyer in the Red Sea intercepted cruise missiles fired toward Israel by Houthi rebels in Yemen raising concerns that the conflict might escalate to a US-Iran confrontation,'' said Ravindra Rao, CMT, EPAT, VP-Head Commodity Research, Kotak Securities

‘’Meanwhile, the US is aiming to buy as much as 6 million barrels of sour crude for delivery to the strategic petroleum reserve in December and January. We expect oil prices to remain buoyed amid higher risk premium,'' added Rao.

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ABOUT THE AUTHOR
Nikita Prasad
Nikita covers business news and has been producing news on digital platforms since 2018. She writes on economy, policy, markets, commodities, industry. Her core areas of interests include infrastructure, energy, oil and gas, railways, and transport/mobility. She has worked for business news channels like Moneycontrol, NDTV Profit, and Financial Express in the past. If you have story ideas/pitches/reports or quotes/views to share, reach her at nikita.prasad@htdigital.in.
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Published: 21 Oct 2023, 07:50 PM IST
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