Oil Edges Lower in Asia but Holds Weekly Gains on Geopolitical Support

Oil slipped slightly in Asian trading after a firmer close overnight, yet remains on course for solid weekly gains. Prices have been buoyed by geopolitical tensions, with markets monitoring potential supply risks stemming from the Russia-Ukraine conflict and rising U.S.-Venezuela frictions.

Expectations of a Federal Reserve rate cut next week continue to provide support, as easier policy can stimulate economic activity, boost energy demand, and weaken the dollar — making dollar-priced commodities more attractive. Strong U.S. jobs data did little to shift this outlook, UOB analysts note.

“Fed fund futures continue to suggest that a 25bp rate cut is fully priced in for the Dec. 10 FOMC meeting,” OCBC strategists add.

Front-month WTI dipped 0.2% to $59.53/bbl but is still on track for a 1.6% weekly gain. Brent eased 0.1% to $63.18/bbl, heading for a 1.2% rise for the week.