Oil prices gained on Friday, as US Secretary of State Antony Blinken prepared to visit the Middle East to try and prevent the Israel-Gaza conflict from widening.
Brent crude futures were up 44 cents, or 0.57%, to $78.03 a barrel, while US West Texas Intermediate crude futures rose 57 cents, or 0.79%, to $72.76 at 1032 GMT.
At its intra-day peak, the WTI futures contract traded more than $1 above previous close.
Both benchmarks are on track to end the first week of the year higher, having almost recouped their losses from Thursday after hefty US gasoline and distillate stock builds.
The price rebound serves as “a reminder of the risk that is rooted in ever-growing tension in the Middle East,” PVM analyst Tamas Varga said in a note.
Israeli forces plan a more targeted approach in the north and further pursuit of Hamas leaders in the south, its defence minister said on Thursday.
As the threat of the conflict expanding persists, Blinken was set to travel to the Middle East for a week of diplomacy, the State Department said.
“There is still plenty of tension in the Middle East with Houthi rebels launching a sea drone in the Red Sea, a US airstrike in Baghdad,” ING analysts said in a report on Friday.
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Investors also watched macroeconomic data for indications of when interest rate cuts might commence, as lower borrowing cuts can spur economic growth and translate to higher oil demand.
Euro zone inflation rose in December and could continue rising in early 2024, which would ease pressure on the European Central Bank to start cutting rates.
The latest US Federal Reserve meeting on Thursday gave a growing sense that inflation is under control and rising concern about the risks that an “overly restrictive” monetary policy may hold for the economy.
Investors will also be looking ahead to US payroll and unemployment data at 1330 GMT.
