Oil prices experienced a slight increase on Friday as concerns over ongoing conflicts in the Middle East and a weakening US dollar influenced market dynamics.
The international oil benchmark, Brent crude, rose by 0.2% to $72.79 per barrel, while the US benchmark West Texas Intermediate saw a 0.14% increase to $68.98 per barrel.
These movements follow the implementation of a cease-fire agreement between Israel and Lebanon, which began early Wednesday. However, Israeli Prime Minister Benjamin Netanyahu's recent comments have created uncertainty regarding the stability of this agreement. Netanyahu indicated that while he would consider a temporary pause for a prisoner exchange, he would not agree to a cease-fire that ends military operations in Gaza.
Netanyahu also noted that the Israeli military is on alert for potential escalations in violence should Hezbollah breach the cease-fire. This has raised fears of intensified warfare, contributing to the upward pressure on oil prices.
Additionally, the US dollar index fell by 0.44% to 105.674, making oil more affordable for buyers using other currencies, which could further boost demand.
Market analysts are also watching the potential for trade tensions between China and the US. Reports suggest that China may lean towards negotiation rather than confrontation, despite high tariffs proposed by the newly elected US President Donald Trump. The Chinese government is anticipated to continue economic support measures to mitigate the impact of possible tariffs.