Oil is poised for a 3% weekly gain, driven by positive US jobs data and heightened risks in the Middle East

Oil prices edged higher on Friday and were on track for a weekly gain of over 3%, supported by positive U.S. jobs data that alleviated demand concerns and ongoing fears of escalating conflict in the Middle East, which heightened supply risks.

Both benchmarks were set to close the week with gains exceeding 3%.

The latest data showed a sharper-than-expected decline in new unemployment claims in the U.S., easing concerns about an economic downturn.

Additional support came from China’s consumer price index (CPI), which rose slightly more than expected last month, according to data from the statistics bureau.

“Chinese inflation data provided a lift to market sentiment, while the geopolitical situation remains tense, with escalating conflict risks continuing to support oil prices,” said the global head of education and research at CFI.

Tensions escalated as Israeli forces intensified airstrikes across the Gaza Strip on Thursday, resulting in at least 40 fatalities, according to Palestinian medics, amid ongoing clashes with Hamas-led militants.

The recent killing of senior members of militant groups Hamas and Hezbollah had raised the possibility of retaliatory actions by Iran against Israel, fueling concerns over oil supplies from the world’s largest producing region.