The price of oil remained almost unchanged on Friday, but is preparing to record a significant increase over the week (WTI +3.6%, Brent +3%) amid easing concerns about demand and ongoing tensions in the Middle East.
Experts said that today's Chinese inflation data provided positive signals for the economy, and along with yesterday's data on the US labor market, improved investor sentiment. The National Bureau of Statistics said that consumer price inflation rose more than expected in July, while producer prices continued to fall. CPI growth accelerated to 0.5% per annum from 0.2% per annum in June. Prices were expected to gain 0.3%. Meanwhile, core inflation that excludes prices of food and fuel, eased to 0.4% from 0.6% in June. The data also showed that producer prices decreased for the 22nd consecutive month. Prices fell 0.8% per annum after a similar decline in June. Economists had forecast prices to drop 0.9%.
As for the situation in the Middle East, yesterday the Israeli armed forces intensified airstrikes on the Gaza Strip in a further battle with Hamas-led militants. Overall, the recent killing of senior members of the militant groups Hamas and Hezbollah has increased the likelihood of Iranian retaliatory strikes against Israel, which has increased concerns about oil supplies from the world's largest producing region. Meanwhile, Iran-aligned Houthi militants continued attacks on international vessels near Yemen.
Prices are also supported by the situation in Libya, where National Oil Corp has declared force majeure at its Sharara oil field since Wednesday. The company said it was gradually reducing production at the field due to the protests.