WTI finds interim support near $73.50 amid hopes of Israel-Hamas truce
- Oil prices find temporary support as Hamas mulls ceasefire proposal.
- China’s poor economic outlook has deepened upside risks to weak oil demand.
- OPEC is expected to make a fresh decision on oil output in March.
West Texas Intermediate (WTI) futures on NYMEX discover interim support near $73.70 as the OPEC+ has maintained its oil output policy and is expected to make a fresh decision on an extension or decline in voluntary cuts in March.
Even though oil prices are showing some recovery in the early European session on Friday, the benchmark is heading for a weekly loss due to deepening economic risks in China. Investors are worried that the real estate crisis in China could impact the growth outlook. This could lead to a significant fall in demand for oil.
It is worth noting that China is the leading importer of oil in the world, and lower oil demand in China impacts the oil price.
Meanwhile, improving hopes for a ceasefire between Israel and Palestine would also stress the oil price. Hamas leader Ismail Haniyeh is expected to discuss a truce to stop the war in Gaza, which will include the release of Israeli hostages. A ceasefire would improve the oil supply chain, eventually strengthening market sentiment.
Meanwhile, investors await January's United States Nonfarm Payrolls (NFP) data. Investors anticipated 180K new workers would be employed against 216K payroll additions in December. The Unemployment Rate is seen rising to 3.8% vs. 3.7%. An upbeat labor market data would indicate a stick outlook for price pressures.
The US dollar remains under pressure as investors hope the Federal Reserve (Fed) will start reducing interest rates from May.