NEW YORK -Oil prices were little changed on Friday but headed for a weekly gain, as Middle East tensions and disruptions to oil output offset concerns about the global economy.
Brent futures were up a cent to $79.11 a barrel at 11:41 a.m. (1641 GMT). U.S. West Texas Intermediate crude fell 9 cents to $73.99.
For the week, the U.S. benchmark is on track to rise about 2% while Brent is set to gain about 1%.
“A lot of the crude oil increase is coming from the increased risks in the Middle East and trouble in the Red Sea,” said Tim Snyder, economist at Matador Economics.
On Friday, tensions escalated in Gaza as Israeli forces pushed south against Hamas militants.
Earlier in the week, Pakistan launched strikes on separatist militants inside Iran in a retaliatory attack, while the U.S. launched new strikes against Houthi anti-ship missiles aimed at the Red Sea.
While tensions In the Middle East have not shut down any oil production, supply outages continued in Libya. In the U.S., about 30% of oil output in North Dakota, the country’s third largest producing state, remained shut due to extreme cold, the state’s pipeline authority said on Friday.
Output had been cut by some 700,000 bpd, or more than half, midweek.
“Supply disruptions remain an upside risk but there are downside risks too, including the global economy,” Craig Erlam, analyst at brokerage OANDA, said.
In China, slower-than-expected economic growth in the fourth quarter raised doubts about forecasts that Chinese demand will drive global oil growth in 2024.
The premium of the first-month Brent contract to the six-month contract rose to as much as $2.15 a barrel on Friday, the highest since November. This structure, called backwardation, indicates a perception of tighter supply for prompt delivery.
Despite its higher demand growth forecast, the IEA’s projection is half that of producer group OPEC. The Paris-based agency also said that – barring significant disruptions to flows – the market looked reasonably well supplied in 2024.
“The forecast for global oil demand growth remains unclear, with stakeholders and research institutions providing widely differing projections,” analyst Bjarne Schieldrop of SEB said.