Bloomberg—Despite a slight increase on Friday, oil prices are on track to experience a third consecutive week of decline. The reason behind this trend is the diminishing concerns over supply disruptions due to the conflict between Israel and Hamas. As these concerns recede, the focus has shifted back to demand issues.
Easing Middle East Tensions Lower Oil Prices
On Friday, Brent crude futures for January saw a modest increase of 40 cents, or 0.5%, resulting in a price of $80.41 per barrel at 0729 GMT. Similarly, the U.S. West Texas Intermediate (WTI) crude futures for December were priced at $76.04, marking an increase of 30 cents, or 0.4%. However, it’s important to note that Brent futures have decreased by 5.7% this week, while WTI has reduced by 5.9% since the previous week. This marks the longest weekly losing streak for both contracts since a four-week drop from mid-April to early May.
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Oil Prices and Economic Implications
The decline in oil prices could positively and negatively impact the economy. Lower oil prices can reduce operating costs for businesses reliant on oil, potentially leading to increased profits and economic growth. On the other hand, countries heavily dependent on oil exports could experience economic setbacks due to reduced revenue.