Oil Set for Weekly Loss With Mideast in Focus After Sinwar Death

(Bloomberg) — Oil headed for a weekly decline, with eyes on developments in the Middle East after the death of Hamas leader Yahya Sinwar.

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Brent traded below $75 a barrel, while West Texas Intermediate hovered around $71, with futures set for a drop of more than 5% this week. The killing of Sinwar by Israeli soldiers led US President Joe Biden to renew calls for a cease-fire in Gaza, although Prime Minister Benjamin Netanyahu said operations are “yet to be completed.”

Sentiment was lifted by a report on Thursday that nationwide US petroleum inventories fell for a fourth week. Data from China on Friday also showed tentative signs of economic improvement in the second-biggest economy, although apparent oil demand fell from a year earlier.

Brent’s latest move higher has failed to offset sharp declines on Monday and Tuesday, after concerns eased that Israel would strike Iran’s energy infrastructure in retaliation for an attack at the start of the month. In the longer term, the International Energy Agency forecast that rising global supply could lead to a sizable surplus next year.

“All things that happened yesterday and overnight considered, an upside correction cannot be ruled out, but this market is unlikely to scale previous summits,” said Tamas Varga, an analyst at brokerage PVM. “The key takeaway from the latest set of data on the oil balance is that supply will exceed demand in 2025 or, depending on the source, its deficit will be less conspicuous than predicted before.”

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