Oil prices surge 3% on Middle East tensions and strong US jobs data

Shafaq News/ Oil prices edged up in Asian trade on Friday, heading for a weekly gain of more than 3%, as US jobs data calmed demand concerns and fears of a widening Middle East conflict persisted.

Brent crude futures rose 9 cents, or 0.11%, to $79.25 a barrel by 0406 GMT. US West Texas Intermediate crude futures were up 12 cents at $76.31 per barrel.

Both Brent and WTI were set to gain more than 3% on a weekly basis.

Israeli forces stepped up airstrikes across the Gaza Strip on Thursday, killing at least 40 people, Palestinian medics said, in further battle with Hamas-led militants as Israel braced for potential wider war in the region.

"Crude oil continued its recovery from its recent plunge as elevated geopolitical risks came into focus," said ANZ analyst Daniel Hynes.

The killing last week of senior members of militant groups Hamas and Hezbollah had raised the possibility of retaliatory strikes by Iran against Israel, stoking concerns over oil supply from the world's largest producing region.

Iran-aligned Houthi militants continued attacks this week on international shipping near Yemen, in solidarity with Palestinians in the war between Israel and Hamas.

On Thursday, the United Kingdom Maritime Trade Operations (UKMTO) agency said it had received a report of an incident near the coast of Mokha, a port city in Yemen.

Lending further support to prices, Libya's National Oil Corp. declared force majeure at its Sharara oilfield from Wednesday, the company said in a statement, adding that it had gradually reduced the field's output because of protests.

Also in the Middle East, the king of Saudi Arabia, the world's largest oil exporter, decreed that the cabinet could convene in the absence of himself and the prime minister, his son Crown Prince Mohammed bin Salman, state media said on Thursday.

The 88-year-old King Salman was treated for lung inflammation in May. Prince Mohammed, 38, has been the de facto ruler since 2017.

Sentiment in the United States was buoyed after data showed the number of Americans filing new applications for unemployment benefits fell more than expected last week, suggesting fears that the labor market was unraveling were overblown and easing recession concerns.

The dollar (.DXY) rose on the jobs data. A stronger dollar usually tends to lower oil prices, however, as buyers using other currencies have to pay more for their dollar-denominated crude.

In China, July consumer price index figures showed no sign of a pick-up in consumer demand, despite consumption-boosting incentives.

Prices rose last month at a rate slightly faster than expected, Friday's data showed, but that was largely because of weather disruptions that affected food supplies.

Markets in key oil trading hub Singapore were closed for a public holiday.

(Reuters)