But circumstances could easily change for the worse, experts say: File Image/Pixabay
Oil on Friday incurred a significant daily and weekly loss – the latter to the tune of over 6 percent – as worries regarding both the Israel/Hamas war as well as central banks raising rates once more eased.
Brent settled down $1.92, or 2.3 percent, to $84.89 per barrel, while West Texas Intermediate settled down $1.95, or 2.4 percent, to $80.51 per barrel.
However, both issues driving trading on Friday were volatile at best, with the Bank of England warning that inflation is still too high, and Hezbollah stating that a wider conflict involving other Middle East countries was still possible.
John Kilduff, founding partner, Again Capital
The market is taking this conflict in its stride
Still, John Kilduff, founding partner at Again Capital, remarked, that "The market is taking this conflict in its stride, as it looks to be neither a significant demand or supply disruption event."
But even if the war doesn't expand to include Middle Eastern oil producing countries, Goldman Sachs theorized that it could affect European economies via lower regional trade, tighter financial conditions, higher energy prices, and lower consumer confidence.
The bank further explained that tighter financial conditions could impact growth and exacerbate the current drag on economic activity from higher interest rates in both the euro area and the United Kingdom.
Other trading influences on Friday included the National Bureau of Statistics reporting that China's manufacturing activity unexpectedly contracted in October, and expectations that Saudi Arabia will agree to an extension of its oil output cut of 1 million barrels per day (bpd) through December.
Rebecca Babin, a senior energy trader at CIBC Private Wealth, said markets have revolved "around demand concerns as Chinese economic data has continued to come in weak and U.S. inventories built."
In other oil related news on Friday, Russia's finance ministry reported that its oil and gas revenues jumped in October due to a cyclical surge in the profit-based tax, and more than doubled from September to $17.6 billion.
Total Russian revenues from oil and gas stood at $8 billion for September.