Oil prices rise amid China’s economic recovery, Middle East tensions

Oil prices surged on Friday, extending their upward trajectory fueled by signs of economic improvement in China and ongoing tensions in the Middle East as negotiations between Israel and Hamas faltered.

Brent futures climbed by 37 cents, reaching 0.4% to $84.24 per barrel, while U.S. West Texas Intermediate crude saw a 0.5% increase, growing by 41 cents to $79.64 at 0003 GMT.

The previous session witnessed oil prices reaching a one-week high following reports of escalating crude oil imports in China during April. Additionally, investors interpreted the cooling U.S. job market as a potential indicator for forthcoming interest rate cuts.

China’s exports and imports rebounded in April after a contraction in the preceding month, signalling a resurgence in demand.

“Ongoing signs of strength in demand in China should see commodity markets remain well supported,” noted ANZ Research in a statement.

However, uncertainty looms over the direction of inflation in the United States in the coming months. San Francisco Federal Reserve President Mary Daly stated on Thursday that there is considerable ambiguity regarding inflation trends while expressing confidence that price pressures are gradually subsiding.

Israeli forces intensified their bombardment of Rafah on Thursday, according to Palestinian sources, amidst the dismissal by Prime Minister Benjamin Netanyahu of U.S. President Joe Biden’s warning to withhold weapons from Israel amid attacks on the southern Gaza city.

A senior Israeli official confirmed late Thursday that the latest round of indirect negotiations in Cairo to de-escalate hostilities in Gaza had concluded without an agreement. Israel intends to proceed with its operations in Rafah and other areas of the Gaza Strip as planned.