Investing.com– Oil prices moved little in Asian trade on Thursday as markets hunkered down before key U.S. economic data due later in the day, while focus also remained on any more developments in the Israel-Hamas war.
Crude markets logged volatile swings this week, as traders struggled to gauge whether the war would spill over into the Middle East region and disrupt crude supplies. Diplomatic missions earlier this week appeared to have prevented some immediate escalation in the conflict.
But persistent bombing of the Gaza strip, along with Israel’s commitment to a ground assault on the region saw traders pricing in a greater chance of escalation in the conflict. This saw oil prices jump 2% on Wednesday, rebounding from a series of recent losses.
These gains paused on Thursday, with Brent oil futures steadying at $90.06 a barrel, while West Texas Intermediate crude futures moved little at $85.39 a barrel by 21:09 ET (01:09 GMT).
Both contracts were trading lower for the week, after a string of weak economic readings from the euro zone brewed doubts over just how strong global oil demand will remain this year, as the bloc faces a potential recession.
U.S. oil inventories also grew more than expected in the week to October 20, with a build in gasoline stockpiles pointing to some cooling fuel demand. But overall U.S. oil stockpiles remained close to historic lows, as the country ramped up oil exports to plug a supply hole stemming from Saudi Arabia and Russia.
US GDP in focus as Fed meeting looms
Data earlier this week showed that U.S. business activity remained robust in October, heralding a potentially strong third-quarter gross domestic product reading later in the day.
Economic growth is expected to have accelerated to 4.2% in the third quarter, indicating continued resilience in the world’s largest fuel consumer. A positive reading could potentially herald resilient oil demand in the remainder of the year.
But strength in the U.S. economy also gives the Federal Reserve more headroom to keep interest rates higher for longer- a scenario that bodes poorly for long-term economic growth.
The central bank is widely expected to keep rates on hold when it meets next week. But Fed officials have still left open the possibility of at least one more rate hike this year. Interest rates are also set to remain above 5% until at least end-2024.
The dollar saw increased bids this week in anticipation of the GDP data and the Fed meeting, which in turn also weighed on oil markets. A stronger dollar makes U.S. crude more expensive for international buyers.
Source: Investing.com
