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Oil Set for 3% Weekly Gain on Rising Mideast Tension, Better US Outlook

The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant
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Oil Set for 3% Weekly Gain on Rising Mideast Tension, Better US Outlook

The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant

Oil prices edged up in Asian trade on Friday, heading for a weekly gain of more than 3%, as US jobs data calmed demand concerns and fears of a widening Middle East conflict persisted.
Brent crude futures rose 9 cents, or 0.11%, to $79.25 a barrel by 0406 GMT. US West Texas Intermediate crude futures were up 12 cents at $76.31 per barrel.
Both Brent and WTI were set to gain more than 3% on a weekly basis.
Israeli forces stepped up airstrikes across the Gaza Strip on Thursday, killing at least 40 people, Palestinian medics said, in further battle with Hamas-led group as Israel braced for potential wider war in the region.
"Crude oil continued its recovery from its recent plunge as elevated geopolitical risks came into focus," said ANZ analyst Daniel Hynes.
The killing last week of senior members of the Hamas and Hezbollah groups had raised the possibility of retaliatory strikes by Iran against Israel, stoking concerns over oil supply from the world's largest producing region.
Iran-aligned Houthi militants continued attacks this week on international shipping near Yemen, in solidarity with Palestinians in the war between Israel and Hamas.
On Thursday, the United Kingdom Maritime Trade Operations (UKMTO) agency said it had received a report of an incident near the coast of Mokha, a port city in Yemen.
Lending further support to prices, Libya's National Oil Corp. declared force majeure at its Sharara oilfield from Wednesday, the company said in a statement, adding that it had gradually reduced the field's output because of protests.
Sentiment in the United States was buoyed after data showed the number of Americans filing new applications for unemployment benefits fell more than expected last week, suggesting fears that the labor market was unraveling were overblown and easing recession concerns.
The dollar rose on the jobs data. A stronger dollar usually tends to lower oil prices, however, as buyers using other currencies have to pay more for their dollar-denominated crude.
In China, July consumer price index figures showed no sign of a pick-up in consumer demand, despite consumption-boosting incentives.
Prices rose last month at a rate slightly faster than expected, Friday's data showed, but that was largely because of weather disruptions that affected food supplies.
Markets in key oil trading hub Singapore were closed for a public holiday.

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Turkish Cenbank Inflation Forecasts Unchanged, Vows Tight Policy

Business and residential buildings are seen in Sisli district, in Istanbul, Türkiye, July 26, 2024. REUTERS/Dilara Senkaya
Business and residential buildings are seen in Sisli district, in Istanbul, Türkiye, July 26, 2024. REUTERS/Dilara Senkaya
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Turkish Cenbank Inflation Forecasts Unchanged, Vows Tight Policy

Business and residential buildings are seen in Sisli district, in Istanbul, Türkiye, July 26, 2024. REUTERS/Dilara Senkaya
Business and residential buildings are seen in Sisli district, in Istanbul, Türkiye, July 26, 2024. REUTERS/Dilara Senkaya

The Turkish Central Bank has left its mid-point inflation forecasts for end-2024 and end-2025 unchanged at 38% and 14% respectively, Governor Fatih Karahan said on Thursday, vowing to maintain a tight monetary policy stance.
In a briefing on the bank's latest quarterly inflation report, Karahan said that inflation was projected to fall to 9% by the end of 2026.
"We will decisively maintain our tight monetary policy stance until price stability is achieved," he said. "By maintaining the cautious stance in monetary policy, we envisage that inflation will decline steadily in the rest of the year."
Turkish annual consumer price inflation eased to 61.78% in July, accelerating what is expected to be a sustained slide. Economists see end-year inflation around 42%, Reuters reported.
The bank has raised its policy rate by 4,150 basis points since June last year, but has kept it unchanged at 50% since March to allow the tightening to have an impact.
Karahan said a tight monetary policy stance could be maintained even when the time comes for rate cuts.
"We need to maintain the tight stance for a long time. This does not mean that interest rates will never be cut. A tight stance can be maintained with rate cuts," he said.
The lira was largely flat at 33.5225 to the dollar after his comments, having touched a record low of 33.6700 earlier this week.
EXPECTATIONS CRITICAL
Karahan said the bank's "decisive" monetary policy stance would support the downtrend in monthly underlying inflation amid rebalancing in domestic demand, real appreciation of the lira and the improvement in inflation expectations.
"The convergence of inflation expectations to the forecast range is of critical importance for disinflation," he added.
In its last quarterly report in May, the bank nudged up its year-end inflation forecast to 38% from a previous 36% due to an unexpectedly large rise in the first four months of the year.
The tightening cycle over the last year marked a stark turnaround after years of unorthodox economic policy under President Recep Tayyip Erdogan, who in the past urged low rates despite rising prices.
On July 26, Deputy Governor Cevdet Akcay told Reuters that the bank was not even considering a rate-cutting cycle at this time as easing too early could reignite inflation and extend the pain for an economy on the verge of disinflation.
As it seeks to cool the economy, the bank is also rebuilding foreign reserves which had plunged under previous economic programs that had sought to stabilize the lira.