WTI holds near $76.50, awaits Iran reaction to Haniyeh killing

West Texas Intermediate (WTI) inched higher to near $76.50 per barrel in Friday’s Asian trading, with the price of crude oil finding support from supply risks arising from heightened geopolitical tensions in the Middle East, despite ongoing global demand concerns.

Markets are closely watching Iran’s reaction to the assassination of Hamas leader Ismail Haniyeh.

According to the New York Times, Haniyeh was killed in Tehran after attending the inauguration of Iran’s new president. Both Iranian officials and Hamas have attributed the attack to Israel.

Weak Purchasing Managers Index (PMI) data from both the U.S. and China are raising concerns about oil demand.

The US ISM Manufacturing PMI fell to an eight-month low of 46.8 in July, down from 48.5 and below the forecasted 48.8. Similarly, China’s Caixin Manufacturing PMI came in at 49.8 for July, missing the expected 51.5 and dropping from the previous 51.8.

Oil traders face uncertainty as they navigate a complex situation involving an economic slowdown and increased expectations for a Federal Reserve rate cut.

The CME’s FedWatch Tool shows that traders fully anticipate a 25-basis point rate cut on September 18.

Additionally, traders are closely watching the upcoming July Nonfarm Payrolls (NFP) and Average Hourly Earnings data later Friday, for insights into the US labour market.

(Source: OANDA)