Oil prices rose on Friday as US Secretary of State Antony Blinken began a weeklong visit to the Middle East aimed at containing regional tensions fueled by the Israel-Hamas conflict.
Brent crude futures rose $1.17, or 1.51%, to $78.76 a barrel. West Texas Intermediate (WTI) crude oil futures rose $1.62, or 2.24%, to close at $73.81.
Crude oil rebounded from losses triggered by a large increase in US gasoline and distillate stockpiles on Thursday, with both benchmarks ending the first week of the year higher.
With tensions in the Middle East, the geopolitical trade premium should rise. At current prices, it is difficult for traders to fight against headlines.
Shipping giant Maersk said it will divert all vessels away from the Red Sea for the foreseeable future, warning customers of disruptions.
US employment data shows hiring and wages are rising. The US government’s report showing employment growth in December is expected to support demand this year.
U.S. employers hired more workers than expected in December while increasing wages at a steady pace, it is contrary to financial markets’ expectations that the Federal Reserve would begin cutting interest rates in March.
The Labor Department said nonfarm employment increased by 216,000 jobs last month. Economists had predicted employment would increase by 170,000 jobs. Strong employment indicates strong fuel demand.
The number of drillings decreased for the third time in four weeks. The number of active rigs (the total of oil and gas platforms) fell by one last week to 621, the third decline in four weeks, Baker Hughes said.
Crude oil rigs increased by one to 501, while natural gas rigs increased by two to 118.
