Fundamental Comment

Oil set for weekly loss as geopolitical tensions ease

Oil set for weekly loss as geopolitical tensions ease

Oil prices fell on Friday as geopolitical tensions in the Middle East eased after the U.S.-Iran conflict receded with calm statements by both sides over the past few hours.

As of 08:07 GMT, Brent crude futures slumped 0.28 percent at $65.19 a barrel after hitting a high of $58.65 on Thursday, heading for a five consecutive days of losses.

Crude oil West Texas Intermediate WTI futures was down by 0.37 percent at $59.36 a barrel, preparing for a weekly loss.

As the decline in black gold comes after the quiet reception of Iran’s strike on U.S. forces in Baghdad, especially after US President Donald Trump’s remarks.

Trump hinted that he did not want to respond to the Iranian strikes, noting that there were no casualties.

At the same time, Iran is not seeking to escalate the military conflict, asserting that the attack was in response to the killing of military commander Qassem Soleimani.

On the other hand, the U.S. Energy Information Administration (EIA) report released on Wednesday showed a 1.2-million-barrel increase in US crude inventories for the week ended January 3 to 431.1 million barrels. Analysts had forecast a decline of 3.4 million barrels.

On trade deal front, U.S. President Donald Trump has said he may not agree on the second phase of the trade deal with China until after the November Presidential election.

The president said in remarks to reporters at the White House, Thursday, that his administration will immediately begin negotiating the second phase of the trade deal with China after signing the first phase later this month.

Washington and Beijing are scheduled to sign the first phase of the trade deal next week, according to the Chinese Ministry of Commerce.

Meanwhile, the dollar index, which measures the currency's performance against six major currencies, extended its gains for a fourth straight session at 97.26, edging closer to a two-week high of 97.39.

Later in the day, eyes will focus on the U.S. non-farm payrolls figures, which is mainly used as a key reference for the Federal Reserve. 

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