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For
the week, Brent gained more than 1% and the U.S. benchmark rose
about 3%.
The growing risk of a wider conflict in the Middle East
supported crude prices.
On Thursday, Hezbollah said it fired dozens of rockets at a
northern Israeli town in a "preliminary response" to the killing
of 10 civilians in southern Lebanon, the deadliest day for
Lebanese civilians in four months of cross-border hostilities.
The oil market's reaction to news from the Middle East was
moderate, said Giovanni Staunovo, an analyst at UBS.
"The market sees oil still flowing and disruptions have been
small," he said.
Gaza's largest functioning hospital was under siege in Israel's
war with Islamist group Hamas, as warplanes struck Rafah, the
last refuge for Palestinians in the enclave, officials said.
Threats persisted in the Red Sea after a missile fired from
Yemen struck an India-bound tanker carrying crude oil.
U.S. producer prices increased more than expected in January
amid strong gains in the costs of services, which could amplify
inflation worries. Still, a slump in retail sales prompted hopes
the Fed will soon start cutting rates, which could support oil
demand.
"Hopes for U.S. rate cuts provided support on Thursday, but
investors are now adjusting their positions ahead of a long
(holiday) weekend in the U.S.," said Hiroyuki Kikukawa,
president of NS Trading, a unit of Nissan Securities.
On Thursday, the IEA said global oil demand growth was losing
momentum and trimmed its 2024 growth forecast.
The agency expects global oil demand growth to decelerate to
1.22 million barrels per day (bpd) in 2024, about half of the
growth seen last year, in part due to a sharp slowdown in
Chinese consumption. It had previously forecast 2024 demand
growth of 1.24 million bpd.
The Organization of the Petroleum Exporting Countries (OPEC)
expects oil use to keep rising for the next two decades.
U.S. energy firms this week cut the number of oil and natural
gas rigs in operation for the second time in three weeks, energy
services firm Baker Hughes said in its closely followed report
on Friday.
(Additional reporting by Natalie Grover in London, Mohi Narayan
in New Delhi and Yuka Obayashi in Tokyo; editing by Jonathan
Oatis, Kirsten Donovan and David Gregorio)
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